Tags: Johnson | J&J | Stake | Elan

Johnson & Johnson Sells Entire Stake in Elan

Thursday, 13 Jun 2013 06:56 PM

Johnson & Johnson sold 25.4 million shares of Elan Corp., ending a relationship started four years ago to develop the Alzheimer's disease drug bapineuzumab.

J&J, based in New Brunswick, New Jersey, bought an 18 percent stake in the Irish biotechnology company for $1 billion in 2009 and took over bapineuzumab's development. The medicine, designed to slow Alzheimer's by reducing amyloid plaque buildup, failed last year in the final stage of testing.

J&J sold 82 million shares back to Elan on April 18, the maximum allowed, as part of a Dutch auction, said Ernie Knewitz, a company spokesman. It sold the remaining American depositary receipts Thursday for $332.5 million, carrying out J&J's plans to divest its Elan holdings following a portfolio review, Knewitz said. Each receipt is equal to an ordinary Elan share.

The sale wasn't related to Royalty Pharma's $6.7 billion bid to take over Elan, Knewitz said in a telephone interview. Royalty Pharma, which invests in royalty streams from medicines, said Thursday it may be forced to end its bid for Elan if investors approve a share-repurchasing program or any of three other proposals by the Dublin-based company’s board.

J&J's sale isn't material for Elan, because it’s only 5 percent of the company and won't affect the 50 percent required to approve a transaction, Michael Yee, an analyst at RBC Capital Markets in San Francisco, said in an e-mail.

J&J, the world's largest seller of health-care products, was developing bapineuzumab with New York-based Pfizer Inc. Eli Lilly & Co. said Thursday it stopped a mid-stage trial of another Alzheimer’s disease drug, known as a BACE inhibitor, after signs of potential liver problems.

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Johnson & Johnson sold 25.4 million shares of Elan Corp., divesting all its holdings in the company.

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