Johnson & Johnson buys £610 million Elan stake

Elan said the new entity will be governed by a seven-person board. Five members will come from J&J.

As many as 5 million Americans are believed to have Alzheimer's disease, a progressive neurological condition associated with ageing.

The deal adds to Elan's complicated series of partnerships. Its main product is the multiple sclerosis drug Tysabri, which it markets together with U.S. biotechnology company Biogen Idec Inc .

Elan said it has no intention of selling any part of Tysabri. Naomi Aoki, a spokeswoman for Biogen, said J&J's entry will make no difference to its partnership with Elan.

J&J said the transaction would dilute its adjusted earnings in 2009 by between 2 and 3 cents a share.

Elan said it will update its financial guidance on its next earnings call, but it expects to be profitable on a pretax basis by the end of 2010.

(Reporting by Toni Clarke; Additional reporting by Ben Hirschler, Carmel Crimmins, Lewis Krauskopf, Ransdell Pierson and Jessica Hall; Editing by Maureen Bavdek, Richard Chang, Tim Dobbyn)