Likely No Preliminary Injunction In Favor of Schering-Plough — In “Suncreen Battle Royale”. . . .

Remember that at a hearing last week, Schering-Plough sought a preliminary injunction against portions of Neutrogena’s sunscreen advertising — after taking the depositions of Neutrogena’s scientific expert (and after Neutrogena had taken the deposition of Schering’s expert). I’d say the below excerpt, filed with the court overnight, just about blisters away any meaningful chance that Schering-Plough will win its much sought-after preliminary injunction.

Oh. Right. And did I mention that Neutrogena is owned by Johnson & Johnson? Do you think that Schering’s ire over being hauled into mandatory, binding arbitration, this summer, on non-US Remicade and Simponi sales rights, might have a little something to do with why Schering-Plough — the makers of Coppertone — are so vigorously pursuing these apparently rather-marginal Lanham Act claims? I’ll let these intelligent readers assembled here decide about that.

In any event, here is the crux of what Neutrogena’s lawyers just asserted, in a post-hearing memorandum of law, in Delaware’s federal district court:

. . . .4. The scientific difference of opinion in this case does not warrant preliminary injunctive relief

As the Court noted at the close of the hearing, pure science “rarely has one answer,” and “different scientists [and] different groups describe this science in different ways.” Tr. 166. It is inconceivable that Neutrogena could be held liable under the Lanham Act for false statements in its print ad merely for following what is clearly the FDA and industry standard in communicating to consumers information concerning the parties’ average SPF and PFA scores.

Certainly Neutrogena’s ads could not be held literally false when the most that Schering has shown is that its scientist disagrees with the meaning of the terms used by Neutrogena in its ad. See Borden, Inc. v. Kraft, Inc., 224 U.S.P.Q. 811, 823 (N.D. Ill. 1984) (denying Lanham Act preliminary injunction motion; “[i]n a situation such as this, where the best that can be said about plaintiff’s case is that ambiguities exist, plaintiff has not sustained its burden of proof“); Avins v. Widener College, Inc., 421 F. Supp. 858, 862 (D. Del. 1976) (“a preliminary injunction will not be granted where the application and affidavits reveal that plaintiff’s contentions as to issues of fact and law are “seriously disputed“). . . .

Oh. Well. It will still be a long summer in Kenilworth — with, or without, a TRO, or preliminary injunction — so slather on your sunscreen, folks.

So — Merck’s Merial, Schering’s Intervet. . . Or, BOTH?

Overnight, Merck filed more disclosure materials with the SEC, related to its thinking in soliciting bids for each of the Schering-Plough, and Merck, Animal Health businesses — and/or various combinations thereof.

I continue to believe that the empirical evidence would suggest the shareholders rarely see much additional value, or benefit, when what was once-styled as a merger-of-equals morphs into a “bust-up” transaction. Paying down corporate debt with the proceeds from the planned sale of one or more of the busted-up businesses rarely leads to an immediate, sustainable increase in the value of the stock (in this case, of either Merck, or Schering-Plough). Thus, I think such transactions are often sub-optimal, in terms of unlocking shareholder value.

One notable exception to the above rather bleak state of affairs — would be if very substantial portions, or all, of these businesses were to be dividended, or spun-off, to the existing common stockholders (of Schering-Plough, or of Merck), as a separately traded NYSE-listed security — then the shareholders would presumably have an additional asset to either hold, or divest, distinct from the larger Merck or Schering-Plough equity they now hold. We’ll see, but I’d be surprised if any of the offering books contemplate any part of these Animal Health businesses being spun-, as opposed to being sold-off, for cash, or debt reductions.

In any event, the full SEC filing, then:

. . . .Merck Statement on Animal Health Businesses

Media reports are circulating that Merck is considering selling Schering-Plough’s animal health business or our interest in Merial as part of the companies’ proposed merger.

While the Animal Health unit is an important part of Schering-Plough, Merck is currently participating in this market through our JV with Sanofi-Aventis (called Merial) which had sales of $2.6 billion in 2008. This does add some complexity to the regulatory clearance process for the proposed merger.

As a result, Merck is continuing to explore all of its strategic options for the animal health business. These include divesting Merck’s 50-percent interest in the Merial joint venture or divesting the Intervet/Schering-Plough Animal Health business, among other possibilities.

As we said at the time of the merger announcement, these are both strong businesses and Animal Health is an area in which we will continue to operate. We also said that we have a variety of options with respect to the animal health businesses and we intend to explore the opportunities open to us. We are doing just that.

There have not been any decisions made at this point and it would be premature to speculate about any eventual outcome.

As we continue to explore our options, you should expect continued media attention and speculation about these or other options. . . .

Merck Misses on PROTECT; Schering-Plough (and Merck) Shares Fall on NYSE. . . .

The study was called PROTECT — and even when compared to a placebo — Merck’s drug candidate rolofylline, um. . . didn’t.

Per Yahoo! News:

. . . .Merck said its heart failure treatment rolofylline missed its goals in a trial, failing to improve patient symptoms compared with a placebo. . . .

The medicine failed to meet the primary or secondary efficacy goals in the 2,033-patient Phase III study. . . .

The Whitehouse Station, N.J., company says rolofylline did not reach its primary or secondary goals in the late-stage trial. . . .

And so it goes — being joined at the hip is not always a good thing.