Elan Signs $1 Billion Drug Deal
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Elan Signs $1 Billion Drug Deal |
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LONDON --Elan Corp. (ELN) Monday said it had reached a $1 billion deal with Theravance Inc. (THRX) for a share in the royalty stream of four respiratory drug programs , as the Irish company fends off approaches from pharmaceutical investor Royalty Pharma. Dublin-based Elan said the deal, financed in part with a planned bond issue, will give it a 21% share in the potential future royalty payments that Theravance receives from drug company GlaxoSmithKline PLC on Breo Ellipta, Anoro Ellipta, MABA monotherapy and vilanterol monotherapy. Theravance is seeking to bring the drugs to market with GSK if they are cleared by regulators. Breo Ellipta, a drug for chronic obstructive pulmonary disease, received regulatory clearance from the U.S. Food and Drug Administration last week and the other three drugs are all either awaiting clearance or in late-stage drug trials. Elan Chief Executive Kelly Martin said in an interview he believes all of the drugs are likely to be cleared. The royalty deal is the latest twist in a struggle between Elan and U.S.-based Royalty Pharma for control of the royalty stream attached to Tysabri, a blockbuster multiple sclerosis drug. Elan sold its 50% stake in Tysabri to Biogen Idec Inc., its long-term partner in developing the drug, for $3.25 billion in February, but it retains a share of future earnings . Elan doesn't have any other revenue-generating drugs other than Tysabri, leaving questions about its future strategic direction and shape. Royalty Pharma made an initial approach to Elan in February, valuing the company at $6.55 billion, or $11 a share. It later increased its approach to around $7.3 billion, or $12 a share, but so far only 4.3% of Elan's shareholders have indicated they are prepared to accept Royalty Pharma's offer. "We haven't found any significant shareholder who believes Royalty Pharma has credibility," Mr. Martin said. A representative for Royalty Pharma didn't immediately respond to a request for comment. Write to Jessica Hodgson at Jessica.Hodgson@dowjones.com Subscribe to WSJ: http://online.wsj.com?mod=djnwires |
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