Johnson & Johnson (J&J) and Elan have signed an agreement to research, develop and commercialise selective products for the treatment and prevention of neurodegenerative conditions including Alzheimer’s disease.

As per the agreement J&J (through a newly formed company) will acquire all the assets and rights of Elan related to its Alzheimer’s Immunotherapy Program (AIP).

J&J will in turn invest $1bn in Elan in exchange for newly issued American Depositary Receipts of Elan, representing 18.4% of Elan’s outstanding ordinary shares.

J&J will continue Elan’s activities with Wyeth under the AIP, and will initially commit up to $500m to continue the development and launch activities of bapineuzumab, as well as other compounds.

In return for the transfer rights and assets, Elan will receive a 49.9% equity interest in the newly formed J&J company, which will acquire the AIP.

Elan will then be entitled to a 49.9% share of the profits and certain royalty payments on the commercialisation of products, under the collaboration with Wyeth.