US drug maker Johnson & Johnson is to take an 18.4% stake in Dublin-listed Elan as part of a deal under which it will take over some of Elan's research into the treatment of Alzheimer's disease.
Johnson & Johnson is to pay $1 billion for the Elan shares, while it will invest $500m in the Alzheimer's Immunotherapy Program (AIP). The AIP was set up with Wyeth to research, develop and bring to the market products for the treatment of conditions such as Alzheimer's.
Under today's deal, J&J will set up a new company to take over the AIP. Elan will receive a 49.9% interest in this new company, and will be entitled to a similar share of any profits and royalty payments. One of the AIP's main areas of research is bapineuzemab, which is being evaluated for slowing the progression of Alzheimer's.
Elan's chief scientific officer Dale Schenk said the involvement of J&J would help to ensure that any therapy would be available to the broadest range of patients worldwide.
The deal does not cover Elan's Tysabri and some other potential Alzheimer's treatments on which the Athlone-based company is working. The J&J deal follows a strategic review by Elan.
Shares in Elan closed 91 cent higher at €5.70 in Dublin this evening - up 19%.
