US health care giant Johnson & Johnson is to take up an 18.4 percent stake in Irish drugmaker Elan and acquire rights to Elan's Alzheimer's disease trial drugs, the companies said Thursday.
They anticipate concluding the transaction in the second half of 2009.
Johnson & Johnson will pay one billion dollars for the stake and assume Elan's activities with Wyeth under the Alzheimer's Immunotherapy Program (AIP).
It was also announced that the American firm would initially commit up to 500 million dollars to continue the development of a potential "first-in-class" treatment for slowing Alzheimer's disease, as well as other compounds.
The boards of directors of both Johnson & Johnson and Elan have each approved the transaction, which represents the culmination of an in-depth strategic review by Elan, a joint statement said.
"Johnson & Johnson's development capabilities, commercial experience and global reach will provide the foundation to accelerate the AIP Program development, and increase its potential availability for patients globally," said Sheri McCoy, Johnson & Johnson's global head for pharmaceuticals.
Elan will receive a 49.9 percent equity interest in a newly formed Johnson & Johnson company that will acquire the AIP Program and a similar share of the profits and certain royalty payments upon the commercialization of products under the collaboration with Wyeth, the statement said.
"This transaction will leverage Elan's unique scientific and clinical work and leadership in bringing treatments to market that potentially slow the progression of Alzheimer's disease," said Elan chief executive Kelly Martin.