By LINDA A. JOHNSON AP Business Writer TRENTON, N.J. (AP) — Johnson & Johnson's experimental antibiotic for dangerous skin infections has had two more setbacks — a delay from European regulators, followed by legal action from its Swiss partner in developing the drug. New Brunswick, N.J.-based Johnson & Johnson has long been touting ceftobiprole as a promising treatment for complicated skin and soft tissue infections, including MRSA, a deadly drug-resistant staph germ. But the Food and Drug Administration has twice delayed approval, most recently saying it wants more audit work done at clinical-investigator sites and answers to questions related to the monitoring done at these sites, where the drug was tested on patients. Late Monday, J&J's Jansen-Cilag International NV unit said that the Committee for Medicinal Products for Human Use, an advisory panel of the European Medicines Agency, had delayed approval pending completion of what's called a "good clinical practice inspection." That mainly involves reviewing records at the European hospitals and other sites where patient testing was conducted, said J&J spokesman Ernie Knewitz. On Tuesday, Basel, Switzerland-based Basilea Pharmaceutica, claiming financial damages from the repeated delays, submitted a request for arbitration to the Netherlands Arbitration Institute. A company statement said the arbitration request also involves milestone payments. "In this environment, for small biotechs, any delay is absolutely devastating," said analyst Steve Brozak of WBB Securities. "What is absolutely essential for" Basilea is just one of many projects for Johnson & Johnson, he added. J&J has said it could win approval of seven other new drugs this year alone. Basilea, which discovered ceftobiprole, granted Johnson & Johnson an exclusive worldwide license four years ago for the drug, which would be sold under the brand name Zevtera in European Union countries. J&J applied for approval to sell the drug in the European Union in June 2007. The advisory committee recommended approval last November, but now the committee has halted the EU process until it finishes inspections. Basilea said in a statement that it expects both that process, and submission of the new information requested by the FDA, to be completed in the second half of this year. "Given the paucity of new antibiotics on the horizon, it's not a question of if it will be approved, it's a question of when," Brozak said. Last year, ceftobiprole was approved in Switzerland, Canada and Ukraine. Basilea also has a dermatology drug, alitretinoin, on the market. Johnson & Johnson, on the other hand, is the world's most broad-based health care company, with nearly $64 billion in annual revenue. Still, Brozak said, "there is potential blowback" for Johnson & Johnson, which has been steadily acquiring other companies and does not want to acquire a reputation as difficult to deal with for small companies.