ELAN HAS filed a lawsuit in the US against Biogen Idec, its joint- venture partner in the marketing of multiple-sclerosis drug Tysabri.

The action relates to a letter from Biogen Idec on July 28th last which alleges Elan is in “material breach” of the two companies’ collaboration agreement.

Elan is asking the US court to rule it is not in breach of the 2000 agreement, as Biogen alleges.

The allegations relate to the announcement last month that US pharmaceutical giant Johnson Johnson (JJ) was investing $1 billion (€697 million) for an 18.4 per cent stake in the Irish biotech firm. The deal made JJ the largest shareholder in Elan, which is quoted on the New York, London and Dublin stock exchanges. As part of that deal, Elan put in a place a financing agreement with JJ relating to the joint venture with Biogen.

This relates to a “change of control” clause in the collaboration agreement, which means either Biogen or Elan have first refusal on buying out the 50 per cent of the joint venture they do not own if the other side changes ownership.

In a statement released yesterday, Elan said it “strongly believes that it is in compliance in all respects with the collaboration agreement”. It also criticised Biogen for saying the agreement was not in compliance even though it had not seen the agreement. Elan claims it has offered to provide Biogen with a copy of the JJ agreement, but the offer has not been taken up.

In a statement released last night, Biogen Idec said: “Based on Elan’s public statements and media reports, it is our present understanding that their deal with Johnson Johnson appears to constitute a material breach of our collaboration agreement regarding Tysabri.

“According to our agreement with Elan, neither Biogen Idec nor Elan can assign any rights outlined in the contract to a third party without prior consent from the other partner.”

Since 2000, Elan and Biogen have had a 50/50 joint-venture agreement to market Tysabri. The treatment has generated revenues of more than $1 billion but has not been without its problems.

Tysabri was relaunched on the market three years ago following a 17-month suspension because of its link to a potentially fatal viral brain disorder.

Speaking last month, Elan management confirmed it had an agreement with JJ which could see it finance the purchase of Biogen’s 50 per cent stake in Tysabri, in the event of a change of control at Biogen. “If they financed us, we would end up in a 50-50 collaboration with Johnson Johnson [on Tysabri],” Elan chief financial officer Shane Cook said.

Elan has asked the US court to speed up proceedings as Biogen’s letter has triggered a 60-day period after which the collaboration agreement may be terminated. The Irish firm also wants the court to enter a judgment that would permanently prevent Biogen Idec from terminating the collaboration agreement based on the letter of July 28th.