Print“No buyer materialized during the financial crisis that followed and the spin-off idea fizzled after the company publicly contemplated it in April 2010.”
Elan is selling its drug formulation and manufacturing unit to Alkermes for $960 million, creating an opportunity for the Irish company to unload substantial debt and allowing it breathing room to focus on its pipeline of neurology therapeutics.
In the cash and stock deal, Alkermes will pay Elan $500 million and grant it a 25 percent stake in a new Irish holding company, Alkermes Plc, to be formed through a merger of Alkermes and Elan Drug Technologies.
Elan had contemplated selling or spinning off the drug delivery business, Elan Drug Technologies, since 2008 when it began seeking a way to free up more resources to back its neuroscience-focused portfolio. But no buyer materialized during the financial crisis that followed and the spin-off idea fizzled after the company publicly contemplated it in April 2010.
Alkermes, the long-sought buyer, sees a good fit. It expects the combined company to have growing product, royalty, and manufacturing revenues in excess of $450 million annually as well as the resources to back development of its current pipeline of central nervous system drugs. It will focus on five products in particular: Risperdal Consta, Invega Sustenna, Ampyra, Vivitrol, and Bydureon.
Elan Drug Technologies' main revenue comes from manufacturing and royalties paid on products manufactured for outside clients and products that incorporate Elan's drug delivery technologies. In 2010, those technologies were incorporated into 36 commercialized products around the world, contributing to client sales of more than $3 billion.
Richard Pops, CEO, president and chairman of Alkermes will serve as Alkermes Plc’s chairman and CEO. Shane Cooke, currently the EVP and head of Elan Drug Technologies, will join Alkermes plc as president.
May 12, 2011
http://www.burrillreport.com/article-elan_sells_drug_unit_to_alkermes_for_960m.html
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