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Elan Sells EDT Unit To Alkermes To Generate Cash, Cut Debt

By Sten Stovall Of DOW JONES NEWSWIRES LONDON -(Dow Jones)- Elan Corp. PLC (ELN) Monday sealed a transformational deal to sell its drug technology unit EDT to U.S.-based Alkermes Inc. (ALKS) in a deal valued at $960 million that allows the Irish drug maker to pay down debt and fund pipeline development. EDT and Alkermes will be combined under a new holding company incorporated in Ireland. The combined group, in which Elan will have a 25% stake, will focus on products dealing with the brain and is expected to have annual revenue of around $450 million from 25 products, including treatments for schizophrenia and pain. Elan said the spinoff of EDT--a long-standing aim--will allow it to become a pure neurology-based biotech business with adequate funding. "This allows us to reduce debt and have a lot of cash for investment in the research and development part of the business, which is key for Elan, and it allows us to take financial risk off the table and invest in our science and our assets in the intermediate term, which has been a long-term goal of the company," Elan's Chief Executive Kelly Martin told Dow Jones Newswires. Martin said the restructured company will be able to focus more on its flagship multiple sclerosis treatment Tysabri which it manufactures and sells along with its U.S. joint venture partner Biogen Idec Inc.'s (BIIB). Multiple sclerosis is a chronic, inflammatory condition that occurs when the body essentially attacks its own central nervous system and can be disabling in advanced stages. "Tysabri's growth is very significant and continues to accelerate," Martin said, adding that the medicine's growth potential outside the U.S. looks especially promising. The new entity will be called Alkermes PLC. Richard Pops, currently chairman, president and CEO of Alkermes, will serve as Alkermes PLC's chairman and chief executive. Elan's Chief Financial Officer Shane Cooke, who is also currently head of EDT, will join the new holding company as president. Nigel Clerkin will be Elan's CFO on an interim basis. In 2009, U.S.-based Johnson & Johnson paid $885 million for an 18.4% stake in Elan and acquired rights to advanced research into drugs for Alzheimer's disease, representing most of the value credited to the Elan Alzheimer's pipeline at the time. Martin said the sale of its EDT business "will allow us to focus even more on the area of neuro degenerative diseases with significant strategic and financial flexibility. It's a very shareholder-friendly transaction." The market seemed to agree, and at 0805 GMT Elan shares were up 11%, or 53 cents higher, at EUR553. The share is up 7.5% on year. -By Sten Stovall, Dow Jones Newswires; +44 207 842 9292; sten.stovall@dowjones.com

Stock News for Alkermes (ALKS)
DateTimeHeadline
05/22/201518:32:54Statement of Changes in Beneficial Ownership (4)
05/22/201518:31:15Statement of Changes in Beneficial Ownership (4)
05/22/201518:28:46Statement of Changes in Beneficial Ownership (4)
05/22/201518:02:13Statement of Changes in Beneficial Ownership (4)
05/22/201517:58:51Statement of Changes in Beneficial Ownership (4)
05/22/201517:48:21Statement of Changes in Beneficial Ownership (4)
05/22/201517:43:49Statement of Changes in Beneficial Ownership (4)
05/22/201517:40:11Statement of Changes in Beneficial Ownership (4)
05/21/201517:04:15Statement of Changes in Beneficial Ownership (4)
05/13/201518:06:47Statement of Changes in Beneficial Ownership (4)
05/11/201516:12:00Alkermesâ Corporate Presentation to be Webcast at the UBS Global H...
05/04/201518:06:15Statement of Changes in Beneficial Ownership (4)
05/04/201517:41:39Statement of Changes in Beneficial Ownership (4)
05/01/201503:14:15Alkermes Plc's "Overweight" Rating Reiterated at JPMorgan Chase...
04/30/201508:21:01Quarterly Report (10-q)
04/30/201507:06:35Current Report Filing (8-k)
04/30/201507:00:00Alkermes plc Reports First Quarter 2015 Financial Results
04/23/201517:18:42Statement of Changes in Beneficial Ownership (4)
04/23/201517:13:54Statement of Changes in Beneficial Ownership (4)
04/23/201516:00:00Alkermes to Host Conference Call to Discuss First Quarter 2015...

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