Johnson & Johnson Takes Elan Gamble

Mark Ellis — Sun, 05 Jul 2009 01:38:14 +0000

Johnson & Johnson has decided to invest up to $1.5 billion in Irish Elan Corp., marking a costly move into the search for a cure for Alzheimer’s disease. Elan is a biopharmaceutical company that has performed significant research on drugs that could stop the progression of Alzheimer’s disease and on a vaccine that would eliminate the disease completely.

The investment sent Elan’s shares up 8.6 percent, from $7.00 to $7.60. On the other hand, Johnson & Johnson’s stock fell 1.9 percent to $55.98 per share. This move will make the latter company an extremely important factor in the market of Alzheimer’s treatment and potentially bring the cure to the market faster if the research is fruitful.

Elan also stands to benefit significantly from the investment. The company has struggled as a result of the global economic crisis and the jobs of its executives are at the mercy of Elan shareholders at their July 17 meeting. Most important, though, is the possibility that Alzheimer’s patients and their families will finally find relief.

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Johnson & Johnson Takes Elan Gamble