Elan halts separation plans
pharmafile | August 10, 2010 | News story | Manufacturing and Production, Research and Development, Sales and Marketing | Elan
Irish drugmaker Elan has postponed plans to separate its business into two publicly-listed companies due to adverse market conditions.
Elan had been considering splitting its business into Elan BioNeurology, which would focus on drug development and marketing Elan’s portfolio of medicinal products, and Elan Drug Technologies (EDT).
EDT would then concentrate on contract product development using an array of formulation and drug optimisation technologies, as well as scale-up and manufacturing services.
The company said in a statement: “Market conditions at this time are not conducive to an appropriate valuation, [therefore] Elan has determined that it will not start a process to pursue a separation of the EDT business at this time.”
Elan had made similar plans back in 2008 that were shelved due to the global economic crisis that unfolded in that year. The idea was put back on the agenda this year in April as analysts forecast that the EDT business could be worth up to $1 billion as a separate company.
Elan’s debt reduction plans
Elan also gave an update to its continuing effort to increase financial performance and position the company for continued growth.
One method it is hoping to use to shore up the balance sheets is by paying off around $500 million of its outstanding debt through a combination of cash and the proceeds of a planned round of refinancing.
Commenting on the new financial plans, Elan’s chief executive Kelly Martin said: “Our solid balance sheet, revenue growth and ability to generate cash enable us to focus on developing one of the premier neurodegenerative pipelines in the industry.
“We will continue to do this primarily through our prudent and proven collaborative approach that allows us to reduce the substantial financial investment and execution risks associated with developing new therapies, while enabling our shareholders to participate in the significant value that is created if the therapies are successful.”
Ben Adams
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