Irish drugmaker Elan splurges $380 mn on two acquisitions

Elan Corp, the Irish neuroscience-focused biotechnology company that is resisting a takeover bid from Royalty Pharma, has acquired two small rare disease drugmakers for $380 million.

The Dublin-based company has acquired Vienna-based AOP Orphan Pharmaceuticals AG for $340 million and 48 per cent stake in Dubai-based NewBridge Pharmaceuticals for $40 million.

Elan, which is rebuilding its business after selling its interests in its multiple sclerosis treatment drug Tysabri last month, today said that it will sell one of its drugs in development and buy back $200 million in shares, as well as issue $800 million of debt.

AOP Orphan was founded 1996 by Dr. Rudolf Widmann to provide specially for patients with rare diseases individualised therapies. The company focuses on hematology and oncology, cardiology and pulmonology, neurology and psychiatry, as well as metabolic diseases.

The closely-held company has four late stage pipeline programs, around 145 employees and 2012 revenue of €59 million.

Elan will pay €263.5 million comprising of €175.7 million in cash and €87.8 million in shares, and make potential payments of up to a further €270 million, subject to performance of certain drugs.

Headquartered in Dubai and focused on the Africa Middle East and Turkey, privately-owned start-up specialty pharmaceutical company NewBridge specialises in in-licensing, acquiring, registering and commercialising approved pharmaceuticals and biologics products.

The company, whose shareholders include Kuwait Life Sciences Company and Burrill & Company, focuses in therapeutic areas that include oncology, immunology, metabolic disorders, gastrointestinal and CNS.

Elan has completed the first step in the transaction by paying $40 million in exchange for 48 per cent of NewBridge and appointed two directors to the company.

Elan said that it has the option to buy the remaining stake in Newbridge by 2015 for $244 million.

''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,'' said, Hans Peter Hasler, Elan's COO.

Elan will divest a drug under clinical trials which is designed to manage aggression in patients with Alzheimer's disease and Down's syndrome to Speranza Therapeutics.

As part of the deal, Elan will take 18 per cent stake in Speranza, giving it future royalty rights to the drug, for $78million.

Since selling Tysabri to its US partner Biogen Idec for $3.25 billion plus multi-tiered future royalties on sales of the drug, (See: Biogen Idec to pay Elan Corp $3.25 bn plus for full rights of multiple sclerosis drug Tysabri)

Elan has bought back shares worth $1 billion and paid $1 billion to US-based biotech company Theravance for 21 per cent of the future royalties on four of its experimental respiratory medicines developed in partnership with GlaxoSmithKline.

All these recent deals have made it more difficult for New York-based Royalty Pharma to go ahead with its hostile $5.7-billion bid for Elan.