Elan cashes in 76% chunk of its Alkermes stake for $381 million; Roche updates on Illumina bid

14 March 2012

Ireland-based Elan Corp (NYSE: ELN) revealed yesterday that it has raised around $381 million in net proceeds from the sale of 76% (24.15 million ordinary shares) of its 18% shareholding in US drugmaker Alkermes (Nasdaq: ALKS), net of underwriter fees. These proceeds further strengthen the cash balances and capital structure of Elan, the company said.

Last year, when Elan sold its Elan Drug Technologies (EDT) business to Alkermes, Elan received $500 million in cash and 31.9 million ordinary shares (around 25%) in the newly-created Alkermes business (The Pharma Letter May 9, 2011). Following yesterday's transaction, Elan continues to own 7.75 million (7.75%) of Alkermes ordinary shares, which are subject to legal and contractual transfer restrictions.

At the time of the EDT disposal, Alkermes’ shares were valued at $14.47. Yesterday’s placing at a price of $16.50 represents a 14% gain over the period. Alkermes said it will not receive any proceeds from the sale.

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