US court backs Biogen in fight with Elan over Tysabri

A US District Court has sided with US biotechnology firm Biogen Idec regarding Irish drugmaker Elan's financing deal with drug major Johnson & Johnson, which it said breaks a joint venture agreement between Elan and Biogen. Biogen asserts that the deal breaks the agreement because it occurred without Biogen's consent, and Elan must now forfeit its rights in multiple sclerosis drug Tysabri (natalizumab). Elan had previously sued Biogen to prevent that forfeiture.

In the hearing, Judge Deborah Batts said: It appears to the court that Elan has delegated an obligation it has to Biogen, by taking direction from Johnson & Johnson.' The court gave Elan 28 days to 'cure' the breach, meaning that it can tear up the contract with J&J and pretend nothing ever happened.

In a statement following the ruling made by the court accusing that it had breached the Tysabri collaboration agreement with Biogen, Elan confirmed that it would work with J&J to close the transaction as quickly as possible, consistent with the Biogen Elan Tysabri collaboration agreement.

Elan's total recorded second-quarter 2009 sales of Tysabri, manufactured and distributed jointly by Elan and Biogen, increased 30% to $173.7 million from $133.4 million. Tysabri in-market net sales increased 27% to $253.8 million, reflecting strong patient demand across global markets. In the USA market, Elan recorded Tysabri net sales of $124.4 million for the second quarter, up 25% from last year's $99.3 million. Almost all of these sales were for the multiple sclerosis indication, the company noted

Biogen's  first-quarter 2009 turnover of Tysabri, pulled from the market for a year after it was linked to a deadly brain infection, rose to $115 million.