J&J Buys Into Elan's Alzheimer's Program

Posted on July 2, 2009 @ 08:43 am

Johnson & Johnson and Elan Corp. entered a definitive agreement under which J&J will acquire all of the assets and rights to Elan's Alzheimer's Immunotherapy Program (AIP), through a newly formed company. J&J, through its affiliate, will invest $1 billion in Elan in exchange for newly issued American Depositary Receipts (ADRs) of Elan, which represents 18% of the company's outstanding shares.

The AIP Program is the result of Elan's collaboration with Wyeth to research, develop and commercialize selective products for the treatment and/or prevention of neurodegenerative conditions, including Alzheimer's disease.

Elan will receive a 49.9% equity interest in the newly formed J&J company and will be entitled to a 49.9% share of the profits and certain royalty payments upon the commercialization of products under the collaboration with Wyeth.

J&J will assume and continue Elan's activities with Wyeth under the AIP Program and will initially commit as much as $500 million for the development and commercialization of bapineuzumab, currently in Phase III trials evaluating slowing the progression of Alzheimer's disease, as well as other compounds. The agreement provides for additional funding as needed.

"Alzheimer's disease is a significant unmet need in aging populations globally," said Sheri McCoy, J&J’s worldwide chairman, Pharmaceuticals. "Johnson & Johnson's development capabilities, commercial experience and global reach will provide the foundation to accelerate the AIP Program development, and increase its potential availability for patients globally."

Elan chief executive officer Kelly Martin contends that this transaction positively impacts Elan and patients globally, remarking, "This transaction will leverage Elan's unique scientific and clinical work and leadership in bringing treatments to market that potentially slow the progression of Alzheimer's disease. The Elan commitment to scientific innovation and patients remains absolute and we will continue to build upon and expand our leadership in the fields of neuroscience and immunology."