Dialing down debt

Elan Corp. plc (NYSE:ELN) is starting to implement its plan to clean up its balance sheet, which was one of the goals when it collected $885 million from Johnson & Johnson (NYSE:JNJ) in a July 2009 deal to put the biotech's Alzheimer's disease immunotherapy program in a jointly owned newco called Janssen Alzheimer Immunotherapy.

When the partners first disclosed the deal, Elan said it hoped to use the funds to reduce its net debt by more than 70% to about $400 million. But the original $1 billion J&J was slated to invest was reduced to $885 million after a U.S. court ruled the deal breached an Elan contract with Biogen Idec Inc. (NASDAQ:BIIB) by providing the pharma an option to autoimmune drug Tysabri natalizumab(see BioCentury, Sept. 21, 2009). ...