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J&J to acquire Alzheimer's Immunotherapy Programme from Elan

New Brunswick, New JerseySaturday, July 4, 2009, 08:00 Hrs  [IST]

Johnson & Johnson and Elan Corporation plc announced a definitive agreement whereby J&J will acquire substantially all of the assets and rights of Elan related to its Alzheimer's Immunotherapy Programme (AIP Programme), through a newly formed company. In addition, Johnson & Johnson, through its affiliate, will invest $1 billion in Elan in exchange for newly issued American Depositary Receipts (ADRs) of Elan which will represent 18.4 per cent of Elan's outstanding ordinary shares. The AIP Programme represents Elan's interest in a collaboration with Wyeth to research, develop and commercialize selective products for the treatment and/or prevention of neurodegenerative conditions, including Alzheimer's disease. J&J, through its affiliate, will assume and continue Elan's activities with Wyeth under the AIP Programme and will initially commit up to $500 million to continue the development and launch activities of bapineuzumab, a potential first-in-class treatment that is being evaluated for slowing the progression of Alzheimer's disease, as well as other compounds. The agreement provides for additional funding obligations of the parties if needed. In consideration for the transfer of these rights and assets, Elan will receive a 49.9 per cent equity interest in the newly formed J&J company that will acquire the AIP Programme. Elan will be entitled to a 49.9 per cent share of the profits and certain royalty payments upon the commercialization of products under the collaboration with Wyeth. The AIP Programme includes multiple compounds being evaluated for slowing the progression of Alzheimer's disease. The lead compound (bapineuzumab), administered intravenously once every three months, is currently in phase-3 clinical trials. A subcutaneous formulation, administered once a week, is currently in phase-2 trials. In addition, a vaccine for Alzheimer's disease (ACC-001) is also under development. In the US alone, as many as 5.3 million people are living with Alzheimer's disease. The direct and indirect costs of this and other dementias to payers, including government programmes, amount to more than $148 billion annually, according to the Alzheimer's Association. "Alzheimer's disease is a significant unmet need in aging populations globally," said Sheri McCoy, worldwide chairman, Pharmaceuticals, J&J. "J&J's development capabilities, commercial experience and global reach will provide the foundation to accelerate the AIP Programme development, and increase its potential availability for patients globally." Elan chief executive officer, Kelly Martin, believes that this transaction positively impacts Elan and patients globally. "This transaction will leverage Elan's unique scientific and clinical work and leadership in bringing treatments to market that potentially slow the progression of Alzheimer's disease. The Elan commitment to scientific innovation and patients remains absolute and we will continue to build upon and expand our leadership in the fields of neuroscience and immunology." Husseini Manji, Global Therapeutic head, Neuroscience, J&J Pharma Research & Development, added, "This transaction will be a key component in achieving our vision to develop treatments that target underlying disease biology, thereby helping to prevent some of society's most devastating illnesses. We expect to focus our resources on bringing the AIP Programme to fruition as quickly as possible because of its potential to slow the progression of Alzheimer's disease." Dale Schenk, executive vice president and chief scientific officer for Elan provided a perspective that "After twenty years of following the science and advancing this technology into the latest stages of clinical development, it is our responsibility to ensure that this therapy, upon further clinical and regulatory progress, may be made available to the broadest range of patients globally. The capabilities of J&J will help in achieving that goal." Upon closing, the transaction will have an estimated dilutive impact of $0.02 to $0.03 on J&J 2009 adjusted earnings per share. The companies anticipate concluding the transaction in the second half of 2009. The boards of directors of both J&J and Elan have each approved the transaction, which represents the culmination of an in-depth strategic review by Elan. The transaction is conditioned on clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. Elan Corporation, plc is a neuroscience-based biotechnology company committed to making a difference in the lives of patients and their families by bringing innovations in science to fill significant unmet medical needs.

 
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