In an effort to appease all parties involved, Elan announced on Monday that it had restructured its agreement with Johnson & Johnson, knocking $100 million off the price tag of the blockbuster MS drug Tysabri, and eliminating any mention of the drug from the fine print.
Back in June, J&J offered to pay $1 billion for 18.4 percent of Elan’s corporate shares and $500 million for control of Elan’s Alzheimer’s pipeline. As part of the deal, J&J would get a chance to purchase rights to Elan’s half of Tysabri—a 50/50 partnership with Biogen Idec. What J&J hadn’t banked on was that Biogen Idec—Elan’s partner on Tysabri—would object to the deal and enforce a clause that would revert 100 percent control of the drug to one partner company if the other firm was sold.
"It appears to the court that Elan has designated an obligation it has to Johnson & Johnson by taking direction from Johnson & Johnson on the purchase price negotiations," Manhattan federal court judge Deborah Batts said in a report from Reuters earlier this month. “[Biogen] is within its rights [to give Elan] the opportunity to cure that breach.”
On Monday, Elan stated in a release that it had “cured” the breach of contract and that it had revised its deal with J&J to leave out any mention of Tysabri. In other words, it’s going to be business as usual for Elan and Biogen—and J&J can’t touch Tysabri.
Elan, however, had to renegotiate the price tag on the J&J bid, which dropped from $1 billion to $885 million. As part of the deal, J&J will get access to all of Elan’s Alzheimer’s treatments, which will be managed under the newly formed Janssen Alzheimer Immunotherapy. Elan will have a 49.9 percent stake in the new company, and will share profits and receive milestone payments.
No word on whether Biogen Idec is content with the final outcome.