On 02 July 2009, Johnson and Johnson Ltd.(J&J) announced the acquisition of Elan corporation PLC's (Elan) assets related to the development of drug used for treating neurodegenerative conditions. Moreover, Elan is receiving an investment of US$1 bn for its rights and assets and will also receive a share in future profits and royalty revenues from the commercialisation of those drugs. With this development, we now hold a positive outlook for the company and, consequently, we upgrade our ADR rating from a HOLD to a BUY. We will reassess our target price and rating in our next update report, once company announces its 2Q 09 and FY 2009 results. Despite our anticipation of a significant negative currency impact on the European stock over the medium term, we upgrade the European stock from a HOLD to a BUY based on our fundamental outlook. We will reassess our target price and rating in our next update report, once company announces its 2Q 09 and FY 2009 results.

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