It's not often that one binary event can mean so much for a large pharma. It takes a lot of sales to move the revenue needle and one drug launch isn't going to do that in the short term.

That is unless the drug is already on the market and bringing in a cool $2.7 billion, in which case the potential loss of the drug is a very big deal.

That's the situation Merck (NYSE: MRK) faces with the potential loss of Remicade. The anti-inflammatory made up nearly 6% of Merck's sales last year, but it could all go poof if arbitration with its marketing partner Johnson & Johnson (NYSE: JNJ) doesn't go its way.

Merck acquired the rights to market Remicade and Simponi, a follow-up compound, in most countries outside the U.S. through its purchase of Schering-Plough. Technically Merck set up the acquisition so that the smaller Schering-Plough bought Merck, and then changed its name to Merck to avoid triggering the change-in-control provision in the marketing agreement.

Johnson & Johnson balked and took Merck to arbitration. Johnson & Johnson doesn't need Merck's help in marketing the drug. The partnership dates back to Schering-Plough marketing the drug for Centocor, which Johnson & Johnson bought in 1999.

Remicade isn't going to be a cash cow forever. Pfizer (NYSE: PFE), Rigel Pharmaceuticals (Nasdaq: RIGL), and Incyte (Nasdaq: INCY) are developing oral rheumatoid arthritis drugs that will likely take market share from Remicade and the rest of the anti-inflammatory drugs that have to be injected or infused.

But for now Remicade is a major contributor that increased 17% last year. Losing the rights to Remicade is going to hurt. A lot.

The companies haven't guided exactly when the arbitration ruling will be handed down, but most analysts believe it'll happen in the next few months. Unfortunately, unless you're a lawyer specializing in acquisitions -- and probably even if you are -- it's nearly impossible to guess the outcome of the arbitration hearing.

What is clear is that this is a very big deal for Merck. Investors should expect biotech-FDA-decision like movements in the stock price in either direction depending on the outcome.

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