Elan and Biogen square up for fight over Tysabri

C&I Issue 16, 2009

Irish drug firm Elan and biotech heavyweight Biogen Idec are tussling over the rights to the multiple sclerosis (MS) drug Tysabri.

The two firms have had a profitsharing agreement for Tysabri in place since 2000.

On 2 July, however, Elan announced a $1bn equity investment by an affiliate of Johnson & Johnson for 18.4% of the company.

Biogen Idec claims the move is grounds for terminating the Tysabri agreement. In a letter to Elan on 28 July, it asserted that the deal with Johnson & Johnson is in material breach of its profit-sharing agreement because the money could be used to purchase Biogen Idec’s Tysabri rights, if Biogen underwent a change of control in the future.

It is thought that the original Tysabri agreement can be terminated if the terms are broken by, for example, unilateral delegation of rights.

On 6 August, Elan said it had filed a declaratory suit in a US Federal court against Biogen Idec, arguing that it has not broken the terms of its Tysabri agreement with Biogen Idec, and asking the Court to prevent Biogen from terminating the agreement based on the 28 July letter.

‘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,’ said Elan in a statement.

Elan notes that Biogen Idec made the assertions even though it was not in possession of the Johnson & Johnson agreement at the time, and says it has offered to share with Biogen Idec the details of that agreement.

Tysabri (natalizumab), a monoclonal antibody, was approved in November 2004. The drug was widely expected to become a blockbuster thanks to its superior efficacy compared with other MS therapeutics. But Tysabri was withdrawn from the market in February 2005 after it was linked with a deadly neurological condition. But with MS patients still clamouring for the drug, Tysabri has been back on the market since June 2006, and generated $254m in the second quarter of 2009 alone.

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