Elan strikes more deals to repel Royalty bid
By Padraic Halpin
DUBLIN (Reuters) - Elan announced its second major drug deal inside a week on Monday and said it would buy back more shares as it continues to bat against a $5.7 billion takeover bid from U.S. investor Royalty Pharma.
Having rejected the Royalty bid, the Irish drug firm has been trying to convince shareholders to do the same by returning cash and going on a spending spree that began with a $1 billion drug royalties deal of its own just a week ago.
On Monday Elan said it has now also agreed to buy two private drug firms, spin off its one experimental drug as a private company and buy back more shares to give a firmer idea of how the company will be reconfigured as shareholders weigh up the takeover bid.
Elan made its second and third purchases on Monday, buying Austrian rare drug specialist AOP Orphan for 263.5 million euros ($337 million) and paying $40 million for a 48 percent stake in Dubai-based sales and marketing firm Newbridge Pharmaceuticals.
It will still have $1.2 billion of cash left to spend if shareholders approve the acquisitions, and plans to announce more deals in the second half of the year, chief executive Kelly Martin said on Monday.
The deal with AOP Orphan, which has annual revenues of over 50 million euros, hands Elan a number of mainly blood-related and oncology-focused drugs and experimental treatments on top of its own existing and newly purchased royalty streams.
"The timing of this has nothing to do with the Royalty offer itself but it's being communicated this way because this allows shareholders a choice," Martin told Reuters.
"(Do) they want to sell their shares to Royalty at a discount or do they want to continue to be invested in an entity that is creating a portfolio of interesting and different assets?" Continued...