Elan (ELN) Restructures Tysabri Collaboration w/ Biogen (BIIB); Will Get $3.25B Upfront

February 6, 2013 6:25 AM EST
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Elan Corp. plc (NYSE: ELN) announced that it has agreed to restructure the Tysabri collaboration with Biogen Idec (Nasdaq: BIIB). Under the terms of the agreement, Elan will move from the current 50:50 business collaboration to an upfront payment of $3.25 billion and a double digit tiered royalty structure for the complete asset.

Highlights of Transaction Upon Closing:

* Up front cash payment of $3.25 billion to Elan
* First 12 months: royalty of 12% of Tysabri global net sales (all indications)
* Tiered royalty structure after 12 months
* 18% on up to $2 billion of global net sales (all indications)
* 25% on over $2 billion of global net sales (all indications)
* Biogen Idec will have full ownership and control of Tysabri
* Current 50:50 collaboration will terminate
* Provides tax efficient capital and long term cash flow to Elan

Elan’s CEO, Kelly Martin, commented “This transaction enables Elan and its shareholders to realize, upon close, a meaningful percentage of the current value of Tysabri while maintaining long term cash flow realization through the multi-tiered royalty structure of the complete asset.

Mr. Martin added, “The restructuring of this business collaboration provides Elan with significant strategic flexibility. Future actions will be guided by our consistent and multi-year approach of dynamic risk/reward assessment of business opportunities. We are enthusiastic about the market opportunities around the globe and remain flexible and creative about the manner in which we would participate in those opportunities.”

“Upon close, this highly unique platform provides us with the financial resources to create an enterprise that will diversify its assets, generate future income, maintain specific science and clinical translational capabilities, and leverage the financial and business structure from being a 40 year Irish plc.”

“Our motivation was to diversify and de-risk the company to move forward; and for the patients to continue to benefit from the profound efficacy of Tysabri. The risk of one asset and a single collaborator was not ideal”.

Mr. Martin concluded, “Over the past twelve years, Biogen Idec has been a terrific collaborator. I would like to personally thank them for their professionalism, sincere focus on patient care and our corporate relationship overall. As we move into the future, we look forward to participating in Tysabri’s success over the intermediate and long term as it continues to provide benefit to patients who suffer from relapsing remitting MS. Additional life cycle opportunities in secondary progressive MS and/or other non-MS indications may represent further advancements for patient choice and broad utilization of this unique therapeutic asset.”


The transaction has been approved by the boards of directors of both companies and is subject to the customary review process under the Hart-Scott-Rodino Antitrust Improvements Act in the United States, other customary review processes and closing conditions. The transaction is expected to close by the end of the second quarter 2013.


Citi and Ondra Partners are acting as financial advisors to Elan. Cadwalader, Wickersham & Taft LLP and A&L Goodbody are acting as legal counsel to Elan.

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