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Markets News Afternoon: Johnson & Johnson in $1.5bn deal with Elan; Shares surge in Dublin but ISEQ in red; Stocks down sharply in Europe and US
By Finfacts Team
Jul 2, 2009 - 5:14:54 PM
US drug and healthcare group Johnson & Johnson is to take an 18.4% stake in Irish drug company Elan as part of a deal under which it will take over some of Elan's research into the treatment of Alzheimer's disease.
Johnson & Johnson is to invest $1 billion in Elan shares and $500 million in the Alzheimer's Immunotherapy Program (AIP), which was set up with US drugs company Wyeth to research, develop and bring to the market products for the treatment of conditions such as Alzheimer's.
J&J plans to establish a new company to take over the AIP. Elan will receive a 49.9% interest in this new company, and will be entitled to a similar share of any profits and royalty payments. One of the AIP's main areas of research is bapineuzemab, which is being evaluated for slowing the progression of Alzheimer's.
The deal does not affect Elan's Tysabri and some other potential Alzheimer's treatments.
Elan Chief Executive Officer, Kelly Martin, believes that this transaction positively impacts Elan and patients globally. "This transaction will leverage Elan's unique scientific and clinical work and leadership in bringing treatments to market that potentially slow the progression of Alzheimer's disease. The Elan commitment to scientific innovation and patients remains absolute and we will continue to build upon and expand our leadership in the fields of neuroscience and immunology."
Husseini Manji, M.D., Global Therapeutic Head, Neuroscience, Johnson & Johnson Pharmaceutical Research & Development, added: "This transaction will be a key component in achieving our vision to develop treatments that target underlying disease biology, thereby helping to prevent some of society's most devastating illnesses. We expect to focus our resources on bringing the AIP Program to fruition as quickly as possible because of its potential to slow the progression of Alzheimer's disease."
Dale Schenk, PhD, Executive Vice President and Chief Scientific Officer for Elan provided a perspective that "After twenty years of following the science and advancing this technology into the latest stages of clinical development, it is our responsibility to ensure that this therapy, upon further clinical and regulatory progress, may be made available to the broadest range of patients globally. The capabilities of Johnson & Johnson will help in achieving that goal."
Elan's shares are up 25% in Dublin.
Bloomberg reports the Air France plane that crashed into the Atlantic Ocean on June 1 didn’t break up in flight, French investigators said.
Flight AF447 from Rio de Janeiro to Paris, with 228 people on board, hit the water “with strong vertical acceleration,” Alain Bouillard, director of the investigation, said at a press conference outside Paris today.
“We are far from determining the cause of the accident,”he said. “We are still hopeful of finding the black boxes.”
The Airbus 330 aircraft was in one piece when it hit the water, Bouillard said. He said that the plane’s pilots made no distress calls, adding that investigators had found no inflated life jackets, suggesting that the passengers and crew had been taken by surprise.
US nonfarm payroll employment continued to decline in June and the job loss of 467,000, was higher than expected. The unemployment rate was little changed at 9.5 percent - - the highest level since August 1983 - - the Bureau of Labor Statistics of the US Department of Labor reported today. Job losses were widespread across the major industry sectors, with large declines occurring in manufacturing, professional and business services, and construction. Since the recession began in December 2007, payroll employment has fallen by 6.5 million. The broad measure of unemployment rose to 16.5 percent.
Ahead of the July 4th weekend, the jobs report put a damper on sentiment and the Dow Jones Industrial Average sank 171.8 points, or 2.02%, to 8332.28, with all 30 components down.
The S&P 500 fell 2.2% and the Nasdaq Composite Index was down 2.4%.
The Governing Council of the European Central Bank (ECB) agreed at its meeting in Luxembourg today, to keep its benchmark interest rate on hold at 1.00%.
In Europe, shares fell sharply after the US jobs report and the Dow Jones Stoxx 6000 lost 2.4%.
Moody's, the US credit ratings agency, today joined its two rivals - - Standard & Poor's and Fitch - - in downgrading Ireland's debt on worries about the country's public finances and the planned transfer of toxic property loans to the State "bad bank" - - the National Assts Management Agency (NAMA). The agency said it will also be monitoring Ireland's plans to cut public spending.
On the New York Mercantile Exchange, oil for August delivery is trading at $66.87 down $2.44 from Wednesday's close. In London, Brent crude for August delivery is trading at $66.63 a barrel.
Currencies
The euro is trading at $1.3991 and at £0.8541.
For live currency updates, check the right-hand column of the Finfacts home page.
The dollar traded at a record low $1.6038 per euro on July 15th.
