We had some hints yesterday, but today it’s clear: Provisions in J&J’s recently deal to acquire a big stake in Elan mean the company may wind up owning half of the rights to the multiple sclerosis drug Tysabri. Here’s the deal. Elan co-markets Tysabri with Biogen Idec. Each company has the option to buy full rights to the drug if the other company is acquired. We’ll let Elan CFO Shane Cook take it from here: However, we recognize that if there was a change of control at Biogen Idec, and given the very significant value of Tysabri, it would be very difficult for us on our own to fund its purchase … Consequently, we have entered into a financing arrangement with J&J that is relevant only should there be a change of control at Biogen Idec … Under the terms of that

finance arrangement J&J has the right to finance our purchase of the other half of Tysabri. If J&J was to exercise that right then we would enter into a 50/50 collaboration with J&J for completion of the purchase and satisfaction of the financing provided by J&J. We’re delighted with this aspect of the arrangement, as it potentially gives us great flexibility in the event of a change of control at Biogen Idec. Those comments come from the company’s earnings call today, according to a transcript from Thomson Reuters. As we noted yesterday, the fact that J&J can reach into its deep pockets to grab Tysabri rights may make potential Biogen suitors wary — and it may signal that J&J itself is a possible suitor. Photo: Bloomberg News

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Long Arm of J&J Reaches Tysabri