Elan sells European sales and marketing business for $120 million
pharmafile | January 5, 2004 | News story | | Elan
Debt-laden Irish pharma company Elan has sold its European sales and marketing business to Medeus – a new pharma company backed by Apax Partners Funds – for $120 million.
The deal includes the sale of the UK business as well as 100% equity of its German, French, Spanish, Italian and Irish affiliates. Elan will keep its operations in Athlone, Ireland as well as its research and development activities in Stevenage, England, and said it anticipates selling “certain rights” to two products in the UK and Ireland for about $10 million.
Commenting on the sale, chief executive Kelly Martin, said: “Divesting these operations is consistent with our strategy of focusing on areas that are essential to our future and enable us to tailor our European sales and marketing efforts towards our pipeline products.”
Elan spent 2003 selling assets to cover debts amounting to more than $2.7 billion after an accounting scandal resulted in an investigation by US investor watchdog the Securities and Exchange Commission. At the beginning of December 2003 it spent $493.1 million buying back a large part of its debt.
At the end of 2003 Elan also completed the sale of its four pain products and related assets for $101.8 million. North-Carolina-based specialty pharmaceutical company aaiPharma purchased the rights to Roxicodone, OramorphSR, Roxanol and Duraclon after making a cash payment to Elan of $50.4 million and assuming $51.4 million of Elan’s product-related payments
Elan is also seeking binding arbitration over a dispute with Pfizer over its Exclusive and Mutual Beta Secretase Inhibitors Research, Development and Marketing Agreement (the “Ageement”).
Elan terminated the Agreement, alleging breaches by Pfizer and maintains it holds the exclusive worldwide license for the programme.
“Prior to taking this step we made every effort to come to a mutually acceptable resolution that would enable us to move forward either with Pfizer or independently,” said Mr Martin.
“Given the potential medical importance of the beta secretase programme and our leadership position in Alzheimer research and development, we will take the appropriate course of action to enforce our rights under the Agreement.”
Elan was the biggest company on the Irish stock exchange two years ago but an admission from then chief executive Donal Geaney that two off-balance sheet expenses had not been consolidated triggered a downwards spiral in investor confidence from which the company has still not recovered.
The company’s accountancy practices are still the subject of a Securities and Exchange Commission investigation, which analysts expect to be completed by mid-2004.
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