J&J formally takes 18% stake in Elan
The $885 million (€601m) deal gives J&J – through its affiliate company, Janssen Pharmaceutical – an 18.4% equity stake in Elan.
A further $500m will give J&J a 50.1% controlling share of Elan’s Alzheimer’s treatment pipeline – with that division now being controlled by a newly formed joint venture company, Janssen Alzheimer Immunotherapy. Elan will have a 49.9% share of the venture.
Elan’s share price slipped slightly by 1c yesterday to close at €5.25.
J&J had, initially been set to pay $1bn for its equity stake in Elan (the payment for the Alzheimer’s interest has not altered) but got a discount as part of the “curing” of Elan’s collaboration breach over the multiple sclerosis drug, Tysabri, with its co-owner Biogen Idec.
The original deal with J&J had given it the option to give Elan money to acquire Biogen’s 50% stake in Tysabri, should Biogen itself be bought out and this was ruled as a breach of agreement by a US court earlier this month, after Biogen contested the clause.
Elan’s share price had jumped healthily, earlier this week, on the news that it had cured its breach with Biogen over Tysabri and was close to finalising the terms of its J&J deal, ahead of the end of September deadline.
Meanwhile, the US pharmaceutical industry’s regulatory body – the Food and Drug Administration (FDA) – has said that the total number of PML cases among users of the Tysabri drug (the rare brain disease is a potential side effect of the treatment) has reached 13 since the drug was returned to market in 2006.
This effectively means that two more cases have come to light in MS sufferers using the drug since July.
That was when Biogen ceased reporting weekly updates on PML numbers on its website, choosing to report new cases at healthcare conferences and directly to the FDA instead.
However, the FDA has also said that there remains no need for additional warnings on Tysabri’s labeling on account that the instances of PML amongst users are still well within the recommended one patient for every 1,000 users risk ratio.
Elan said that the level of PML activity was in line with expectations and that the disease remains “a rare adverse event” in relation to Tysabri usage.
