UPDATE 1-Elan, J&J cut deal price, resolve Biogen dispute

* Price for 18.4 pct stake to $885 mln from $1 bln

* J&J deal amended to eliminate Biogen breach

LOS ANGELES, Sept 14 (Reuters) - Elan Corp Plc (ELN.I) has resolved a disputed partnership agreement with Biogen Idec Inc (BIIB.O), lowering the price Johnson & Johnson (JNJ.N) will pay for a minority stake in the Irish drugmaker.

Elan said in a statement on Monday it has "cured an unintended breach of its Tysabri collaboration agreement with Biogen."

The company said J&J will invest $885 million in Elan in exchange for 18.4 percent of Elan's outstanding shares. The deal had previously called for a $1 billion payment.

Elan said J&J will still pay $500 million to acquire a major stake in Elan's portfolio of experimental Alzheimer's drugs.

A U.S. District Court ruled earlier this month that Elan's pending deal with J&J violated Elan's 50-50 partnership to sell multiple sclerosis drug Tysabri with Biogen, a Cambridge, Massachusetts-based biotech company whose shareholders include billionaire investor Carl Icahn. (Reporting by Deena Beasley; editing by Andre Grenon)