J&J in talks to reduce $1.5 bln Elan deal price: source

on September 13 2009 8:32 PM

U.S. health-care firm Johnson & Johnson is in talks to cut the price of a $1.5 billion deal with Irish drugmaker Elan Corp , a source familiar with the negotiations said on Sunday.

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)

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