IRISH pharmaceuticals giant Elan Corporation today announced that it will pay $1bn (£650m) in return for 21 per cent of future royalties which biopharmaceutical company Theravance makes from its collaborations with GlaxoSmithKline.
“We are very excited to partner with Elan in a transaction that recognizes the significant value of four programs from our GSK collaborations targeted at respiratory disease,” said Rick E Winningham, chief executive at Theravance.
“This agreement complements our strategy to facilitate and accelerate the return of capital to our stockholders and build value, consistent with our recently announced plan to separate Theravance into two entities, Royalty Management Company and Theravance Biopharma.”
Kelly Martin, chief executive of Elan commented: “This transaction, upon closing, will immediately diversify our business with an investment in four high quality and late stage clinical assets within a large and growing therapeutic area.
“This diversification should benefit our shareholders by spreading the inherent risk embedded in any one specific asset. In addition, the long term and future potential cash flow streams and net income will be shared with investors both directly - through a dividend pass through - and indirectly through overall after tax earnings.”