Elan makes "transformational" acquisitions and a divestment

Ireland-headquartered Elan Corp (NYSE: ELN) (Elan) this morning announced a series of transactions designed to decisively transform and advance the company. Upon shareholder approval, the totality of these strategically driven decisions, in addition to the $1 billion Theravance royalty participation agreement and dividend pass through announced last week (The Pharma Letter May 13) and the previously completed $3.23 billion Tysabri (natalizumab) transaction with Biogen Idec, will form a dynamic and unique business foundation for Elan in the years ahead. Elan is at the same time fighting off a hostile takeover approach from Royalty Pharma (TPLs passim).

These include: a) the acquisition of privately held orphan disease company, AOP Orphan based in Vienna, Austria, for 263.5 million euros ($337.9 million); b) the acquisition of 48% of a privately held Africa, Middle East & Turkey Company, Newbridge Pharmaceuticals, headquartered in Dubai for $40 million; c) divestment of ELND005 into Speranza Therapeutics, a private Irish company, in which Elan committed to a $70 million upfront payment (plus a potential $8 million) for an 18% minority equity position plus royalties in major markets along with additional milestones, and retention of commercial rights in certain territories and markets; and d) debt issuance of $800 million; and e) share repurchase of $200 million.

Kelly Martin, chief executive of Elan commented: “Our proposed package of transactions is designed to create a balance of risk (science, molecules, regulatory and reimbursement) with the benefit of diversification (therapeutics, geographies, science and operational constructs) to produce long-term growth in income and value.”