IRELAND’S Elan agreed a $960m (£587.5m) deal to sell its drug delivery business to US firm Alkermes yesterday, cutting its debt pile by two thirds and making it a pure biotech firm.
Elan will get €500m (£437.8m) in cash and a 25 per cent stake in Alkermes which it will start reducing, in consultation with Alkermes, after a six month lock-up period. Elan will likely retain some small holding in the group.
“We think this is a very shareholder-friendly deal. We are going to have a lot of cash and we are going to have a lot of growth on the topline,” chief executive Kelly Martin said.
Elan will lose €80m in core earnings from the sale but Kelly said the company would more than recoup that within 12 months due to sales growth from its key multiple sclerosis drug.