Elan Corp. PLC plans to pay about $338 million for a privately held, Austrian drug developer and at least $110 million for stakes in two other companies as the Irish drugmaker continues to refocus after unloading its main revenue source, an ownership stake in the multiple sclerosis drug Tysabri.
The Dublin-based company said Monday it will buy AOP Orphan Pharmaceuticals in a cash-and-stock deal valued at about 263.5 million euros. AOP, based in Vienna, focuses on rare diseases in hematology/oncology and cardiology/pulmonology. Elan also may make up milestone payments of up to 270 million euros ($346.7 million) depending on the development of potential treatments in late-stage clinical research.
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Elan also will pay $40 million for a stake in Newbridge Pharmaceuticals, a private specialty pharmaceutical company based in Dubai in the United Arab Emirates. Elan has an option to buy the remaining stake in the company by 2015 for $244 million.
The Irish drug developer also will spend $70 million for a minor stake in Speranza Therapeutics and will divest to that company the development of ELND005, a potential treatment for agitation or aggression in patients with Alzheimer’s disease and Down syndrome.
Elan also said Monday it plans to offer $800 million in senior notes due in 2021 to help pay for acquisitions, share repurchases and capital requirements, among other things.
These announcements came a week after the company said it plans to pay $1 billion for the right to future royalties from four respiratory treatments being developed by Theravance Inc. and GlaxoSmithKline. The deal announced will give Elan 21 percent of the future royalties that South San Francisco, Calif.-based Theravance receives from Glaxo, a British drugmaker.
The companies expect to close that royalty agreement at the end of June if Elan shareholders approve it. Elan plans to use 20 percent of the sales it receives from this agreement to pay shareholders a cash dividend.
Last month, Elan closed a deal to sell its interest in Tysabri to Biogen Idec Inc., its former partner on the blockbuster drug, for $3.25 billion in cash and recurring royalty payments. Elan has said it plans to use some proceeds from the Tysabri sale to refinance its debt and make investments that will diversify its assets.
In the first quarter, Elan lost $72.8 million, or 12 cents per share, from continuing operations in the first quarter. Almost all of its $344 million in revenue came from Tysabri sales.
Elan has recently received takeover bids from Royalty Pharma, a private, New York-based company that buys royalty interests in drugs and late-stage drug candidates. Royalty offered in February to buy Elan for $11 per share, or about $6.5 billion. It later raised that offer to $11.25 per share, or about $6.7 billion. Last month, Elan said its board unanimously rejected the takeover bid, with company leaders saying the price was too low.
Elan shares closed at $11.67 on Friday in New York.
