Elan in dispute with Biogen over Tysabri

Irish drugmaker Elan Corporation has filed suit against USA-based Biogen Idec in Federal Court in New York seeking declaratory and injunctive relief that certain aspects of Elan's recently announced $1.5 billion transaction with affiliates of Johnson & Johnson comply with Elan's collaboration agreement with Biogen for the development and marketing of the multiple sclerosis drug Tysabri (natalizumab).

In a letter to Elan dated July 28, Biogen alleged that Elan was in material breach of the collaboration agreement. Biogen's assertion against Elan relates to the latter's ability to obtain financing from an affiliate of J&J to potentially purchase Biogen's Tysabri rights, if Biogen undergoes a change of control. Biogen made this assertion even though it was not in possession of the relevant agreement related to the Transaction at the time, which Elan has offered to share with it. Elan strongly believes that it is in compliance in all respects with the Collaboration Agreement.

Elan noted in a statement, 'There's nothing in the pending Transaction that is contrary to our collaboration agreement with Biogen Idec for Tysabri, an important therapeutic discovered and primarily developed by Elan. Elan's collaboration with Biogen Idec has been in place since 2000. During that time, Elan and Biogen Idec have obtained regulatory approval for Tysabri in the United States, the European Union and other countries and have made the significant benefits of Tysabri available to a growing number of patients throughout these countries. Nothing about that relationship has changed. This is the same agreement we have been operating under for the last nine years. It is unfortunate that, because of Biogen Idec's actions, Elan was left with no alternative but to seek court intervention to protect its interest.'