Alkermes and Elan Drug Technologies complete merger
The contract manufacturing and development unit of Irish drugmaker Elan has completed a near-$1 billion merger with drug delivery specialist Alkermes to create a new, Dublin-based technology company.
The completion of the handover of Elan Drug Technologies provides its parent company with $500 million in cash and around a 25% equity stake in the new firm, which will be known as Alkermes plc.
The new entity will have sales of around $450 million a year and will be led by Alkermes’ chief executive Richard Pops.
“Through this transaction, we have strategically combined two highly innovative companies with proprietary technologies and important commercial products, creating a strong platform for accelerating future growth and increasing shareholder value,” said Pops in a statement.
Alkermes celebrated its first day of operations with the announcement of a “multiyear, multimillion dollar manufacturing agreement with one of the world’s top 10 pharmaceutical companies”, which will bring in $15-20 million in additional revenue over the next five years. The finished product will be made at the former EDT unit in Athlone.
EDT specialised in applying novel formulation technologies to improve the profile of drugs, particularly those that are poorly-soluble in water, and contract manufacturing. Its technologies have already been applied to a number of products, including Janssen’s Invega Sustenna (paliperidone) for schizophrenia and Acorda Therapeutics’ Ampyra (dalfampridine) for multiple sclerosis.
Alkermes’ business model has focused on contract manufacturing and generating royalty revenues for products which use its drug delivery technologies, notably Janssen’s antipsychotic Risperdal Consta (risperidone). The company also has direct product sales revenue from alcohol dependency treatment Vivitrol (naltrexone), and is also developing a portfolio of central nervous system medicines.
Elan has been trying to sell EDT for years in order to pay down its debt, but dropped its plans in 2008 citing unfavourable market conditions. In 2010 it proposed separating EDT from its core drug development and marketing business via a spin-out, but this was once again dropped because of scant external financing.
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