Elan Corporation, plc (2011)
Class Period: Jul 2, 2009 to Aug 5, 2009
Lead Plaintiff Deadline: Apr 26, 2011 + Deadline passed
Summary of Case:
A securities class action has been filed against Elan Corporation, plc (2011) ("Elan" or the "Company") on behalf of all securities purchasers from July 2, 2009 through August 5, 2009, inclusive ("Class Period") in the United States District Court for the Southern District of New York.
The complaint alleges that among other things, that during the Class Period, defendants made materially false and misleading statements about a transaction between Elan and Jonshon & Johnson ("JNJ"). The complaint alleges that defendants stated that JNJ had agreed to pay $1 billion for %18.4 ownership of Elan and 50.1% ownership of a new company, Janssen Alzheimer Immunotherapy ("Janssen"), a subsidiary formed by JNJ to acquire Elan's Alzheimer immunotherapy program.
The complaint alleges that defendants failed to disclose that the agreement with JNJ violated the terms of an existing collaboration agreement between Elan and Biogen Idec Inc. ("Biogen") for the development and sale of multiple sclerosis drug Tysabri. That agreement provided that if either Elan or Biogen were to experience a change of control, the other company could negotiate to purchase the full rights to Tysabri. Per the agreement, this right could not be assigned to any other party. The claims alleges that the Elan/JNJ agreement, however, gave JNJ the option to finance an Elan change of control purchase of Biogen's stake in Tysabri. The Elan/JNJ agreement also gave Elan's negotiating power in such a transaction to JNJ, thus designating an obligation it had to JNJ in violation of the Elan/Biogen agreement. When this came light, Elan was forced to renegotiate its agreement with JNJ, with JNJ paying $115 million less to Elan than it had previously agreed to.
According to the complaint, when the possible breach of the Elan/Biogen agreement finally came to light the price Elan's ADSs declined as artificial inflation came out the price.
If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.