Royalty urges court to let bid go

City A.M. Reporter
INVESTMENT partnership Royalty Pharma yesterday urged a federal court in New York to allow it to proceed with a potential $8bn bid for Irish drug company Elan.

In a brief submitted in advance of a hearing tomorrow in the US District Court in Manhattan, Royalty Pharma said that on Friday it provided the additional disclosures about its bid that Elan had said were missing when the target company obtained a temporary block against Royalty from the court last week.

Royalty Pharma on Friday raised its hostile bid for Elan for the third time in five months. Royalty is now offering $13 cash per share, up from $12.50, plus a new contingent value right (CVR) clause that could mean an additional $2.50 per share if Elan’s multiple sclerosis drug Tysabri hits certain sales milestones.

Royalty Pharma said in the new filing that it had made clear to Elan on Friday that it intends to acquire all of Elan’s shares, replace its directors and then look toward layoffs and sales of Elan's interests in drugs that are still in research and development.

A spokesman for Elan had no immediate comment.

Elan last week won a temporary order from the US court against Royalty Pharma’s bid after arguing that Royalty might stop its tender after receiving just one more share than 50 per cent and then take control and leave the rest of Elan's investors short of information and power over Royalty’s plans.

The hearing scheduled for tomorrow is over Elan’s request from the same court for an injunction against Royalty Pharma’s bid. Elan is also fighting Royalty in court in Ireland.