Monday, March 04 11:07:21
Irish drugmaker Elan has sweetened the terms on offer to shareholders under its $3.25 billion disposal plan, as it aims to stave off an approach for the company from U.S. investment firm Royalty Pharma.
Elan said today it would give shareholders 20 percent of future royalties from multiple sclerosis drug Tysabri, in which it holds a 50 percent interest that it proposes selling to its U.S. partner Biogen Idec.
The Irish group had unveiled the restructuring a month ago, saying it would gain strategic flexibility to buy new assets. It has already said it would also return $1 billion to shareholders.
Those plans were put under question when New York-based Royalty made its $6.6 billion approach last week, but Elan said on Monday most of its shareholders did not view the idea as worth consideration.
Elan Chief Executive Kelly Martin said neither the cash handout to shareholders or the royalty plan were in direct response to Royalty's approach.
"We simply don't view the Royalty indication of interest as credible. The vast majority of our investor base simply don't view Royalty's indication as worthy of any discussion," Martin told Reuters in a telephone interview.
"I wish Royalty well, they can do what they need to do, but we're not in any discussions with them at all on any topic and we don't see any need to have those discussions," Martin said.
The CEO added he was referring to Elan's outside investors and had not discussed the approach with Johnson & Johnson , which owns 18 percent of the group.
Royalty, which buys royalty streams of patented drugs, said last week it had not received a formal response from Elan and planned to spend the next few weeks calling Elan shareholders, according to a source familiar with the offer.
The group's indicative approach, worth $11 per Elan share, could scupper Elan's plans to spend the rest of the proceeds from the Tysabri deal on a series of acquisitions, effectively reinventing itself as a company.