Elan says it intends to unload $500 million in debt and will delay spinning off its drug delivery technology unit for now in light of poor market conditions.

The current market is “not conducive to an appropriate valuation” of Elan Drug Technologies, the company says, noting that it is pleased with the unit’s “strong performance” and the recent launch of Ampyra, a multiple sclerosis drug dispersed using Elan’s technology, with partner Acorda Therapeutics.

The $500 million debt payment—to be financed in part by a sale of $200 million in senior notes due in 2016—will erase approximately 20 percent of the company’s current $1.5 billion obligations and save it between $5 million and $10 million in annual interest costs.

“We continue to carefully manage both our balance sheet and cost structure to ensure that we remain financially strong,” says Elan’s CEO, Kelly Martin.

Martin, who plans to step down as Elan’s CEO in May 2012, has been heavily criticized for sinking so much money into the company’s quest to develop the experimental Alzheimer's therapy bapineuzumab. Johnson & Johnson joined the party in July 2009, promising to invest $1 billion more into the compound’s development in exchange for a minority stake in Elan. Now both companies are dealing with a long wait for the results of a late-stage trial of bapineuzumab, something not expected until at least 2012.

In addition to extending the maturity of its obligations, Elan hopes to reduce the amount it owes by as much as $190 million through an asset sale required as a consequence of its deal with J&J, it says.

The company also confirmed its financial guidance for 2010 and said that it expects to end 2010 with cash and investments approaching $400 million after making the debt repayments and forking out more that $200 million to settle federal charges regarding the sales and marketing practices of its antiepileptic medicine, Zonegran.