Elan spins off drug discovery
14.08.2012 - The Irish pharma company Elan Corporation plc is to spin off its drug discovery business.
The drug maker will spin off its drug discovery business unit Neotope Bioscience with about 80 employees and US$120m to US$130m in start-up capital from Elan. The remaining core of Elan would employ 90-110 people and would be profitable immediately. It will consist of three main assets: the Multiple Sclerosis drug Tysabri, which had sales of US$1.5 bn last year and is expected to grow by 15 percent annually over the next four years, as well as the small molecule ELND005, a beta amyloid anti-aggregation agent for neuropsychatric indications. Elan will retain its interest in Janssen AI, which in partnership with Pfizer is developing Elan’s Alzheimer’s Immunotherapy Portfolio.
The announcement came only days after Pfizer and Johnson & Johnson pulled the plug on the Phase III development of the Alzheimer drug Bapineuzumab. The move fueled speculation that Elan strives to make itself more attractive as a buyout target. Elan’s CEO Kelly Martin did nothing to mitigate takeover fantasies: „What other companies want to do with regard to looking at our assets or any other assets is up to them - we're all public companies,“ he said. „There are no obstructions that we have put in place or that we seek to put in place.“ Analysts at Jefferies quickly concluded that a buyout certainly appears to be the intended goal here. "Jefferies thinks many will view Elan's announcement as the first step towards making the company more appealing for a takeover by Biogen," the group concluded.
Elan has partnered its drug Tysabri with Biogen Idec, why some analysts believe Biogen may use the opportunity to buy Elan, in a similar way that GlaxoSmithKline recently bought Human Genome Sciences to get full control of lupus drug Benlysta.