Biogen granted more time in drug dispute with Elan
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Wednesday August 26 2009
A US court has delayed a key hearing in the dispute between Athlone-based drugmaker Elan and its research partner Biogen Idec over their collaboration agreement for the multiple-sclerosis treatment Tysabri, allowing the US firm more time for preparation.
The hearing, originally set for August 31 in a federal district court in New York City, will now be held on September 10 and will focus on whether the court should block Biogen from ending that agreement.
In an order filed last week, Biogen was granted quick access to documents related to a July agreement for Johnson & Johnson (J&J) to buy 18.4pc of Elan along with an option to finance Elan's purchase of Biogen's Tysabri stake, if Biogen were to be acquired at some point.
The deal is expected to close in early September.
Collaboration
Biogen claims that the J&J deal breaches the Tysabri collaboration, which prevents the assignment of any related rights without permission of the other partner.
Shares of Biogen recently were down 39 cents in early US trade to $49.58 while Elan fell 2pc to $7.30.
If Biogen's assertion proves correct, and Elan doesn't fix the issue, Biogen could end the agreement and gain full rights to a drug that generates nearly $1bn in annual revenue and is the major growth driver for both companies.
Under the agreement, signed in 2000, if one company breaches the collaboration and the offense isn't fixed within 60 days, the non-breaching party can terminate the pact and take full control of Tysabri.
That 60-day period will expire September 26, based on Biogen sending a letter on July 28 that alleged the breach.
Elan is seeking a declaratory judgment that the two agreements don't conflict and that it hasn't breached the agreement. Elan asked the court to block Biogen from ending the deal.
- Ailish O'Hora
