Johnson & Johnson (JNJ:US) sold 25.4 million shares of Elan Corp. (ELN), 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 yesterday for $332.5 million (JNJ:US), 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.
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 yesterday it stopped a mid-stage trial of another Alzheimer’s disease drug, known as a BACE inhibitor, after signs of potential liver problems.
J&J was unchanged at $84.91 at 4:04 p.m. New York time. The American depositary receipts for Elan, which formally agreed to a sales process today and invited Royalty Pharma to bid, rose 8.3 percent to $13.66.
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