Issue Date: August 17, 2009
Elan Sues Biogen Idec In Spat Over J&J Deal
Elan and Biogen Idec are fighting about whether a company can trade away half a partnership. Since 2000, the two firms have jointly developed and commercialized the multiple sclerosis drug Tysabri, which could hit $1 billion in annual sales. But last month, when Elan agreed to sell its Alzheimer’s drug program and an 18% stake in itself to Johnson & Johnson, it also gave J&J the option to help buy out Biogen’s half of Tysabri—which would be possible in the event that Biogen were acquired—and thus own the drug equally with Elan. In response to that move, Biogen alleges that Elan has breached their collaboration and that Biogen can take ownership of Tysabri in 60 days if the breach is not fixed. Elan, in turn, has sued Biogen, asking a federal court to rule that it is in compliance and to prevent Biogen from terminating the collaboration. Before J&J came along, debt-ridden Elan seemed unlikely to be in a position to acquire Tysabri, which has become an important product for Biogen and of interest to would-be acquirers of the firm. A hearing has been scheduled for Aug. 31; the 60-day resolution period ends on Sept. 26.
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