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Arbitrator Awards Amgen $90 Million

September 10, 1992

TRENTON, N.J. (AP) _ An arbitrator’s ruling in a series of drug-marketing disputes has cleared the way for Amgen Inc. to pay Ortho Pharmaceuticals Corp. tens of millions of dollars, the companies said Wednesday.

The arbitrator found Tuesday that Ortho, a subsidiary of New Brunswick, N.J.-based Johnson & Johnson, reneged on agreements with Amgen to develop two drugs, a hepatitis B vaccine and the anti-cancer drug Interleukin II, the companies said.

Under the ruling, which has not been finalized, Johnson & Johnson will pay Amgen more than $90 million, the companies said. However, the money will be subtracted from the total Amgen already owes Johnson & Johnson.

Last October, the arbitrator, retired federal judge Frank J. McGarr, awarded Ortho $164 million for Amgen’s failure to uphold an agreement to market the anti-anemia drug erythropoietin, known as EPO.

Johnson & Johnson estimates that it is owed $85 million, said company spokesman F. Robert Kniffen.

″After the exact amount is finalized, one would assume there would be a flow of money to Johnson & Johnson,″ said Sarah H. Crampton, spokesperson for Thousand Oaks, Ca.-based Amgen.

She declined to estimate how much that final amount will be.

The companies still must work out a formula to compensate each other for sales of EPO, but that process will not delay Amgen’s payment, the companies said.

A 1985 agreement allows Amgen to market EPO for use by kidney dialysis patients, while Ortho has rights to sell the drug for other treatments, including use by AIDS patients.

Amgen made $409 million on EPO sales to dialysis patients last year, Crampton said.

Kniffen refused to release Johnson & Johnson’s 1991 sales figures for EPO, except to say that the total was more than 1990′s $190 million.

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