Elan chief explains J&J's Tysabri option

Tysabri rumors have smoked out Elan CEO Kelly Martin (photo). The flurry of talk about Johnson & Johnson's "arrangement" with Elan on the MS drug prompted Martin to come out with details. And here they are: J&J has an option to help finance Elan's purchase of Biogen Idec's rights to Tysabri in the event that Biogen is acquired. Under that scenario, J&J would end up as Elan's 50-50 partner on the drug.

Martin's remarks come after word started leaking out, with sources speculating in the media that J&J might have outright acquired Elan's right to buy Biogen's Tysabri share. As you know, Elan and Biogen's Tysabri partnership includes a provision granting each company the right to buy Tysabri if the other is acquired. J&J is now Elan's largest shareholder, having bought an 18 percent-plus share of the firm for $1 billion.

Elan granted J&J the option to finance a Tysabri buy because the Irish company couldn't afford to do so by itself, Martin told Bloomberg. "We wanted to make sure we were not flat-footed from a financing point of view," Martin told the news service. "Why on Earth would we ever want to sell our half of the asset?"

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