Royalty Pharma offers to buy Elan for about $6.5B (Update)

February 25, 2013

Royalty Pharma said Monday that it wants to buy Elan Corp. PLC for about $6.5 billion, but has yet to receive a formal response from the Irish drugmaker.

The $11-per-share offer, which was made earlier this month and applies to both Elan's regular and American depository shares, represents a 4 percent premium over its closing ADS price on Friday.

The news sent Elan's U.S. shares up 70 cents, or 6.6 percent, to $11.30 in midday trading, after peaking at $11.61 shortly after the session's opening bell.

Royalty Pharma, a private company based in New York, acquires royalty interests in marketed and late-stage biopharmaceutical products. It does not discover, develop or market drugs.

The company said Monday that Dublin-based Elan hadn't formally responded to its proposal and that it's been unsuccessful in engaging the company in talks since the proposal was made.

Elan released a statement questioning the timing of Royalty Pharma's announcement, calling it "highly opportunistic," but left the door open for future offers from Royalty Pharma or other suitors, saying that it will consider any "credible" offer.

Elan noted that Royalty Pharma's public announcement comes before shareholders can properly evaluate a pending deal that's expected to land Elan a $3.25 billion payment related to its collaboration on the multiple sclerosis drug Tysabri.

Elan has been a partner with Biogen Idec Inc. on the drug since 2000, but announced earlier this month that it was ending that arrangement. As part of that deal, which is expected to close soon, Biogen will get full ownership of Tysabri and Elan will get the $3.25 billion payment, as well as royalties on all sales of the drug.

Elan has said that it plans to use part of the payment to buy back $1 billion of its stock, boosting value for the company's shareholders.

Royalty Pharma said Monday it plans to finance the acquisition through a combination of cash and debt.

Over the past 52 weeks, Elan's U.S. shares have traded between $9.37 and $15.27. Over the past year, the shares have lost about 15 percent of their value.

Explore further: KaloBios Pharma edges higher following IPO

shares

Related Stories

KaloBios Pharma edges higher following IPO

February 1, 2013
(AP)—Shares of respiratory drug maker KaloBios Pharmaceuticals are inching higher on the first day of trading.

Zayo Group buying AboveNet for $2.2B

March 19, 2012
(AP) -- Telecommunications company Zayo Group said Monday it will acquire AboveNet Inc. for $2.2 billion. Both companies offer Internet and phone services to companies over fiber-optic networks.

Recommended for you

Best of Last Year—The top Medical Xpress articles of 2017

December 20, 2017
It was a good year for medical research as a team at the German center for Neurodegenerative Diseases, Magdeburg, found that dancing can reverse the signs of aging in the brain. Any exercise helps, the team found, but dancing ...

Pickled in 'cognac', Chopin's heart gives up its secrets

November 26, 2017
The heart of Frederic Chopin, among the world's most cherished musical virtuosos, may finally have given up the cause of his untimely death.

Sugar industry withheld evidence of sucrose's health effects nearly 50 years ago

November 21, 2017
A U.S. sugar industry trade group appears to have pulled the plug on a study that was producing animal evidence linking sucrose to disease nearly 50 years ago, researchers argue in a paper publishing on November 21 in the ...

Female researchers pay more attention to sex and gender in medicine

November 7, 2017
When women participate in a medical research paper, that research is more likely to take into account the differences between the way men and women react to diseases and treatments, according to a new study by Stanford researchers.

Drug therapy from lethal bacteria could reduce kidney transplant rejection

August 3, 2017
An experimental treatment derived from a potentially deadly microorganism may provide lifesaving help for kidney transplant patients, according to an international study led by investigators at Cedars-Sinai.

Exploring the potential of human echolocation

June 25, 2017
People who are visually impaired will often use a cane to feel out their surroundings. With training and practice, people can learn to use the pitch, loudness and timbre of echoes from the cane or other sounds to navigate ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.