Elan Revises Partnership Deal With J&J
DUBLIN (
) --
Elan
(ELN)
said
Johnson & Johnson
(JNJ) - Get Report
will cut the value of a partnership deal to $885 million after Elan said it repaired a breach in its Tysabri agreement with
Biogen Idec
(BIIB) - Get Report
.
Johnson & Johnson previously agreed in July to invest up to $1 billion for an 18.4% stake in Elan. Its stake will remain the same, but be acquired for much less, and J&J will still commit up to $500 million to continue the development of bapineuzumab, a potential treatment for Alzheimer's disease, Elan said in a statement.
Johnson & Johnson's move to cut its stake follows a judge's ruling in which Elan was found to have violated terms of its deal with Biogen over Tysabri, a drug for multiple sclerosis. Elan said Monday it "cured an unintended breach" of the Tysabri agreement with Biogen.
When J&J signed the deal it allowed Elan to get financing from J&J to buy Biogen's Tysabri stake if Biogen was to be acquired. Biogen, however, claimed the Elan/J&J deal breached the Tysabri agreement. A federal judge agreed earlier this month, forcing Elan to fix the J&J pact by the end of September of risk losing all rights to Tysabri, a drug which is on track to generate about $1 billion in revenue this year.
Biogen wouldn't comment on whether it accepted Elan's claims that the Tysabri agreement would remain intact, the
Financial Times
reported.
-- Reported by Joseph Woelfel in New York
.
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