Elan did it: J&J sinks $1B into partnership

Elan's wish came true. The Irish company attracted a Big Pharma partner--Johnson & Johnson--to take a minority stake, just as it's been hoping for all along. J&J will sink $1 billion into Elan in return for an 18.4 percent ownership interest. Plus, J&J will assume Elan's partnership with Wyeth on Alzheimer's remedies; Elan will hand over its related assets to a new J&J affiliate company in return for a 49.9 percent stake in the venture's profits and royalties.

Elan has been seeking a jump-start since January, when it hired Citigroup to explore strategic options, including a sale of part of all of the company. Execs were crystal clear on their preference for a minority partner, however, even as rumors flew about wholesale buyouts. Among those said to be mulling an Elan deal were Lundbeck, Bristol-Myers Squibb, and most recently Sanofi-Aventis.

Meanwhile, management and the board of directors have been at each other's throats, with dissident shareholders complaining that CEO Kelly Martin and other Elan managers lacked the proper experience to pump the embattled multiple sclerosis treatment Tysabri and handle the company's other commercial efforts. Finally Elan invited its most scathing critic, the ex-Abbott Labs President Jack Schuler, to join the board, along with another Big Pharma ex, Charles Bryson, late of Eli Lilly.

Now Elan has a new lease on life--and Johnson & Johnson gets access to the much-watched bapineuzumab, a potential Alzheimer's remedy in late-stage trial. We'll have to wait and see what problem Schuler focuses on next.

- get the release from J&J and Elan [1]
- read the Irish Times story [2]

Related Articles:
Sources: Novartis in talks to buy Elan assets [3]
Source nixes rumors of Elan-BMS merger talks [4]
Lundbeck CFO squelches Elan takeover buzz [5]
Elan drops top Alzheimer's drug dosage in trial [6]