ELAN has told a US court it would be "irreparably injured" if it lost the rights to multiple sclerosis drug Tysabri as a result of its legal battle with the medicine's co-owner, Biogen Idec.

Biogen is trying to seize Elan's rights to Tysabri by arguing that the Irish company's recently announced €1bn investment deal with Johnson & Johnson breaches its joint venture agreement.

Elan is seeking a US district court declaration that no breach has occurred, to allow it to retain its rights to Tysabri, which accounts for over 50% of its revenue. The stakes have been raised by the fact that Tysabri's sales are now accelerating after a series of health scares. Tysabri, invented by Elan, is now on track to achieve blockbuster status with annual sales of over $1bn.

But speculation is mounting that J&J will come to Elan's rescue if it is unable to secure the necessary declaration by allowing the company to wipe the contentious clauses from its investment deal.

The dispute centres on an option in the deal which potentially gives J&J the option to acquire Biogen's 50% stake in Tysabri if Biogen is taken over by another company. Biogen believes this provision breaches its agreement with Elan, which states that neither partner can assign rights to a third party without the other's permission.

"Even if they fail to get the court verdict they need, Elan could easily resolve the issue by 'curing the breach' and removing the relevant clauses from the J&J deal. But I don't know though how Biogen would respond to that," said Ian Hunter, a Goodbody Stockbrokers analyst.