Corporate Banner
Satellite Banner
Genomics
Scientific Community
 
Become a Member | Sign in
Home>News>This Article
  News
Return

Elan Announces Transactions: Decisively Transforming the Company

Published: Monday, May 20, 2013
Last Updated: Monday, May 20, 2013
Bookmark and Share
Upon shareholder approval, the totality of these strategically driven decisions will form a dynamic and unique business foundation for Elan in the years ahead.

CEO Commentary

Kelly Martin, Chief Executive Officer 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.”

Mr Martin added, “Our goal is to create a company that achieves distinct and sustainable success in the health care space. We are not constrained by legacy infrastructure nor associated costs. We will operate flexible business constructs that allow for participation in various parts of the industry value chain for the direct benefit of our shareholders. The resulting ability for effective long-term planning enables us to generate significant after tax margin through advantageous tax structures. Lastly, the acceleration and advancements in science, clinical knowledge and diagnostics across multiple geographies should continue to generate a multitude of additional opportunities for Elan to consider in the months and years ahead.”

Proposed Transactions

AOP Orphan Pharmaceuticals (AOP)

•    Private company, headquartered in Vienna, Austria, focused on rare and orphan diseases
•    Business: clinical translation and medical marketing of innovative drugs in orphan indications
•    Therapeutic areas: Hematology & Oncology, Cardiology & Pulmonology, Neurology, and Metabolic Disorders
•    Four late stage pipeline programs (2014-2018 time frame) in: Hematology/Oncology and Cardiology/Pulmonology indications
•    Founded in 1996 by Dr. Rudolf Widmann (formerly GSK/Wellcome)
•    Approximately 145 employees
•    2012 Revenue:€59 million (~ $76 million ); 2012 Adjusted EBITDA:€15.5 million (~ $20 million)1

Elan will acquire 100% of AOP and upon close Elan will pay €263.5million for the company, comprised of €175.7 million in cash and €87.8 million of Elan ordinary shares. In addition, there will be potential cash milestone payments of up to €270 million on the advancement (filing and acceptance) of certain late stage clinical programs.

Newbridge Pharmaceuticals (Newbridge)

•    Private start-up specialty pharmaceutical company, headquartered in Dubai, UAE and focused on the Africa Middle East and Turkey (AfMET) regions
•    Business: specializing in in-licensing, acquiring, registering and commercializing approved pharmaceuticals and biologics products
•    Therapeutic areas include oncology, immunology, metabolic disorders, gastrointestinal and CNS
•    Other shareholders include Kuwait Life Sciences Company and Burrill & Company
•    Approximately 40 employees
•    Joe Henein – President and Chief Executive Officer (formerly Wyeth Pharmaceuticals)

Elan has completed the first step in its investment in Newbridge by paying $40 million in exchange for 48% of the total fully diluted capitalization of the company. In addition, Elan has appointed two Directors to the Board of Newbridge. Elan has the option to purchase the remaining stake in Newbridge by 2015 for a sum of $244 million.

COO Commentary

Hans Peter Hasler, Elan’s Chief Operating Officer, added “AOP Orphan and Newbridge Pharmaceuticals together create a highly unique business platform. The geographic markets in which they operate are characterized by underlying growth and demand for health care products, broad economic development and increased patient and caregiver knowledge in disease areas such as oncology, cardiovascular-pulmonology, hematology, gastroenterology, neurology and a variety of rare and orphan diseases. We look forward to working together with Dr. Widmann and Joe Henein and their teams to grow, advance and leverage their respective business platforms.”

Speranza Therapeutics (ELND005)

•    Divest ELND005 to an independent company, Speranza Therapeutics, focused on progressing the development of ELND005 (Scyllo-inositol)
•    Current indications and activity for ELND005: Bi-Polar, Agitation/Aggression in Alzheimer’s disease, and Down Syndrome
•    Business objective: file in lead indication – Agitation/Aggression in Alzheimer’s disease
•    Third party equity financial partner will continue with clinical plans with current management
•    Current clinical trials and operations will continue – maintaining momentum

Elan will commit $70 million to the new entity upfront (plus up to a potential future $8 million) for an 18% minority equity position, royalties in major markets along with additional milestones, and retention of commercial rights in certain territories and markets. The third party equity financial partner will commit $20 million for 62% equity position (plus up to a potential future $2 million). The remaining 20% equity will be allocated among Speranza management. This allows Elan to eliminate the operating activities associated with the development of the drug (2013 estimated spend:~ $80 million), while at the same time maintaining a share of the potential upside.

Capital Structure, Balance Sheet and Shareholder Alignment

•    Debt offering of $800m: optimize capital structure, maintain strategic flexibility and significant cash balances
•    $200 million share repurchase program planned; details to be announced
•    Theravance Royalty Participation Interest: 20% pass through cash dividend added to existing Tysabri 20% dividend

CFO Commentary

Chief Financial Officer Nigel Clerkin added, “Upon approval and closing of this set of transactions, the Elan business would be comprised of very high net margin, multi asset and long term revenue streams (within Multiple Sclerosis and Respiratory), an orphan disease platform, and a strong regional commercial presence. All of these are underpinned by a strong balance sheet as well as a highly efficient and strategically advantageous tax structure.”


Further Information
Access to this exclusive content is for Technology Networks Premium members only.

Join Technology Networks Premium for free access to:

  • Exclusive articles
  • Presentations from international conferences
  • Over 2,500+ scientific posters on ePosters
  • More than 3,800+ scientific videos on LabTube
  • 35 community eNewsletters


Sign In



Forgotten your details? Click Here
If you are not a member you can join here

*Please note: By logging into TechnologyNetworks.com you agree to accept the use of cookies. To find out more about the cookies we use and how to delete them, see our privacy policy.


Scientific News
Poor Survival Rates in Leukemia Linked to Persistent Genetic Mutations
For patients with an often-deadly form of leukemia, new research suggests that lingering cancer-related mutations – detected after initial treatment with chemotherapy – are associated with an increased risk of relapse and poor survival.
Searching Big Data Faster
Theoretical analysis could expand applications of accelerated searching in biology, other fields.
Growing Hepatitis C in the Lab
Recent discovery allows study of naturally occurring forms of hepatitis C virus (HCV) in the lab.
Inciting an Immune Attack on Cancer Cells
A new minimally invasive vaccine that combines cancer cells and immune-enhancing factors could be used clinically to launch a destructive attack on tumors.
Reprogramming Cancer Cells
Researchers on Mayo Clinic’s Florida campus have discovered a way to potentially reprogram cancer cells back to normalcy.
Genetic Overlapping in Multiple Autoimmune Diseases May Suggest Common Therapies
CHOP genomics expert leads analysis of genetic architecture, with eye on repurposing existing drugs.
Surprising Mechanism Behind Antibiotic-Resistant Bacteria Uncovered
Now, scientists at TSRI have discovered that the important human pathogen Staphylococcus aureus, develops resistance to this drug by “switching on” a previously uncharacterized set of genes.
How DNA ‘Proofreader’ Proteins Pick and Edit Their Reading Material
Researchers from North Carolina State University and the University of North Carolina at Chapel Hill have discovered how two important proofreader proteins know where to look for errors during DNA replication and how they work together to signal the body’s repair mechanism.
Fat in the Family?
Study could lead to therapeutics that boost metabolism.
Tissue Bank Pays Dividends for Brain Cancer Research
Checking what’s in the bank – the Brisbane Breast Bank, that is – has paid dividends for UQ cancer researchers.
Skyscraper Banner

Skyscraper Banner
Go to LabTube
Go to eposters
 
Access to the latest scientific news
Exclusive articles
Upload and share your posters on ePosters
Latest presentations and webinars
View a library of 1,800+ scientific and medical posters
2,500+ scientific and medical posters
A library of 2,500+ scientific videos on LabTube
3,800+ scientific videos
Close
Premium CrownJOIN TECHNOLOGY NETWORKS PREMIUM FREE!