Schering-Plough Corporation has exercised its rights to develop and commercialize with Centocor Inc., CNTO 148, a fully human monoclonal antibody being developed as a therapy for the treatment of rheumatoid arthritis and other immune-mediated inflammatory diseases, as provided under a 1998 agreement (publicly available as an exhibit to Schering-Plough's 2003 10-K) between Schering-Plough and Centocor.

As a result of the decision to exercise its rights to the compound, Schering-Plough expects to record an R&D charge of approximately $125 million in the third quarter for R&D costs previously incurred by Centocor. Schering-Plough and Centocor will share future development and commercialization expenses related to CNTO 148.

Pursuant to the exercise, Schering-Plough receives exclusive worldwide marketing rights to CNTO 148, excluding the United States, Japan, China (including Hong Kong), Taiwan and Indonesia. Under the 1998 agreement, Schering-Plough has exclusive worldwide marketing rights to Remicade (infliximab), excluding the United States, Japan, China (including Hong Kong), Taiwan and Indonesia. Centocor believes such rights to CNTO 148 expire in 2014, while Schering-Plough believes such rights extend beyond such date. The parties are working together to move forward with their collaboration on CNTO 148 and steps are being taken to resolve the difference of opinion as to the expiration date.

"Schering-Plough has said that in-licensing and related actions are an important element in our Action Agenda to transform Schering-Plough into a high-performance company for the long term. Exercising these rights to CNTO 148 is another important strategic move on this front," said Fred Hassan, chairman and CEO. "Through this action, Schering-Plough expects to further increase our importance to health providers and patients in the area of immune-related inflammatory disorders, where unmet medical need is high," he added.

Phase II studies for CNTO 148 have been completed for the treatment of rheumatoid arthritis (RA) and the agent is expected to move into Phase III studies in early 2006. CNTO 148, which can be dosed by subcutaneous injection, is a fully human monoclonal antibody that specifically targets and binds to tumour necrosis factor-alpha (TNF-alpha), thus neutralizing TNF activity.