J&J Renegotiating Elan Deal: Report

NEW BRUNSWICK, N.J. (TheStreet) -- Johnson & Johnson is trying to lower the price of its $1.5 billion deal with biotech outfit Elan(ELN Quote) in the wake of a court ruling, according to a published media report.

Johnson & Johnson is trying to slash at least $100 million from the $1 billion in cash it had agreed to pay in the deal, according to the report, published Sunday on The Wall Street Journal's Web site. The report cited people familiar with the matter.

Both companies declined to comment, according to the report.

Under the original deal, announced in July, New Brunswick, N.J.-based Johnson & Johnson would take a $1.5 billion stake in the Irish company and the two would work together on treatments for Alzheimer's disease.

Earlier this month, however, a federal judge ruled that the agreement violated an existing deal Elan had with Biogen Idec(BIIB Quote) to jointly market Tysabri, a multiple sclerosis treatment.

The agreement between Elan and Biogen says that if either company is acquired by another party, the remaining partner will have the option of offering to buy all of the rights to Tysabri.

In July, Elan said that Johnson & Johnson might finance a purchase of the Tysabri rights if Cambridge, Mass-based Biogen were acquired by another company.

But Biogen said Elan's comments breached their partnership, and the court agreed. Both partners are supposed to agree if one plans to sell or transfer its Tysabri rights to another company.

After the ruling, Elan had said it would work to close the deal with Johnson & Johnson while staying within the terms of the earlier agreement with Biogen, although it did not provide details on how it planned to do this.