Deutsche Bank Downgrades Elan Corp (ELN) to Hold; Post Tysabri Deal M&A Activity in Focus

Deutsche Bank downgraded Elan Corp (NYSE: ELN) from Buy to Hold with a EUR 7.60 price target following the sale of Tysabri to Biogen.

The firm comments, "Elan’s decision to cede control of Tysabri to Biogen seems to be an attractive deal for both sets of investors to us. Although our valuation suggests the deal is marginally dilutive to our NPV, Elan has swapped hope for certainty. In addition, materialization of this asset allows it to accelerate both utilization of tax losses and its business development efforts, while retaining 25-30% of the future profits of Tysabri. However, uncertainty over use of proceeds sees us move to the sidelines. Downgrade from Buy to Hold.

The firm notes M&A is likely the near-term focus, with management making it clear that the "majority" of proceeds will be utilized to diversify the company’s pipeline and revenue base.

For an analyst ratings summary and ratings history on Elan Corp click here. For more ratings news on Elan Corp click here.

Shares of Elan Corp closed at $10.46 yesterday.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Deutsche Bank Downgrades Qifu Technology (3660:HK) (QFIN) to Hold
• Wolfe Research Downgrades T-Mobile (TMUS) to Peerperform
• Wells Fargo Downgrades Roku Inc. (ROKU) to Equal Weight