Biogen, Elan meet in court today

Biogen Idec and Elan are squaring off in court today, a week earlier than expected. Judge Deborah Batts ordered that the first hearing be moved up, and so we could have closure on the case as soon as this afternoon.

Elan and Biogen are in a tussle over the rights to their multiple sclerosis med Tysabri. The trouble began when Elan inked a deal to sell a minority stake to Johnson & Johnson; the Irish company also gave J&J the option to finance a buyout of Biogen's Tysabri rights, should Biogen ever be sold. Biogen didn't like that provision. It threatened to terminate the Tysabri partnership, claiming that the J&J option breached the Elan-Biogen contract.

Elan sued to block termination of the partnership, which would put all of Tysabri in Biogen's hands. That would be a huge blow to Elan, which has been fighting plenty of other problems, too. In an investor note, Cowen summed up the danger (as quoted in The Street): "We estimate that Tysabri now accounts for 40-50 percent of Elan's share valuation, so an adverse ruling... would be devastating to Elan's share value. We believe Elan has a solid legal case, but this dispute is a wildcard."

In its lawsuit, Elan asked for a preliminary injunction against Biogen. As In Vivo notes, Batt could rule on that request today or on the entire breach-of-contract dispute. Or on neither. We'll have to wait and see.

- read the In Vivo post
- see the news from The Street