J&J agreed in July to pay $1 billion for an 18.4 percent stake in Elan and $500 million for a majority stake in its pipeline of experimental Alzheimer's drugs.
However, Elan and J&J had been widely expected to renegotiate the deal after a court ruled the agreement breached a partnership between Elan and Biogen Idec Inc .
A U.S. judge earlier in September ruled that the deal -- which has not yet closed -- breaches Elan's 50-50 partnership to sell multiple sclerosis drug Tysabri with Biogen, a Cambridge, Massachusetts-based biotech company whose shareholders include billionaire investor Carl Icahn.
The Wall Street Journal reported on Sunday that J&J is attempting to cut at least $100 million off the $1 billion in cash it agreed to pay as part of the deal and that the new terms could be announced in the coming days.
J&J was not immediately available for comment. Elan declined comment.
(Reporting by Toni Clarke in Boston, writing and additional reporting by Megan Davies in New York; Editing by Diane Craft)