Elan Biogen Tysabri Agreement

By September 18, 2021 Uncategorized No Comments

Elan Corporation plc is a neuroscience-driven biotechnology company that aims to change the lives of patients and their families by introducing scientific innovations to address important unmet medical needs that persist around the world. Elan shares are traded on the stock markets of New York and Ireland. For more information about Elan, see www.elan.com. — Termening the TYSABRI Cooperation Agreement and Removing Changes of Control — DUBLIN—(BUSINESS WIRE)-Elan Corporation, plc (NYSE:ELN) announced today that it has agreed to restructure the Tysabri cooperationĀ® collaboration with Biogen Idec. Under the terms of the agreement, Elan will move from the current 50:50 transaction to a $3.25 billion down payment and a double-digit royalty structure for all assets. Shares of Biogen of Cambridge, Mass., fell 97 cents on Thursday to 46.65 $US. Shares of Ireland-based Elan fell 37 cents, or nearly 5 percent, to $7.64. Under the terms of the agreement, Biogen Idec will use its existing cash reserves to pay an amount of $3.25 billion to Elan upon completion of the transaction and to make future conditional payments to Elan of 12% of TYSABRI`s global net sales for the first twelve months, and thereafter, Biogen Idec will continue to make conditional payments of 18% on TYSABRI`s overall annual net sales up to $2.0. billion and 25% on the annual net global turnover that exceeds 2.0 billion dollars. It is only in 2014 that the $2.0 billion threshold will be prorated for the portion of 2014 that will remain at the end of the first 12 months.

In trying to end the collaboration, Biogen says Elan Johnson & Johnson actually gave the right to buy Biogen`s stake in Tysabri. This would run counter to the cooperation agreement which prohibits the transfer of rights to a third party without the agreement of the other partner. Elan says the deal is not contrary to the cooperation agreement, as Elan would be the acquirer from Biogen. It wasn`t until later that he sold half of it to Johnson & Johnson. In 2009, a U.S. judge ruled that Elan violated the cooperation agreement with Biogen on Tysabri after Elan agreed to sell 18.4 percent to Johnson and Johnson and give J&J an option to acquire half a share in Tysabri. Analysts have been speculating for several years that Biogen could gain momentum to take control of Tysabri. The current agreement, under which Biogen Elan will pay $3.25 billion in cash plus royalties, gives Biogen the asset it is most interested in, while Elan provides money for acquisitions and development of its investigational drug pipeline. Biogen has been the subject of takeover rumors in recent years and ended an official search for a buyer in late 2007 after activist investor and Biogen shareholder Carl Icahn insisted the company be sold: Biogen said in December that it had not received qualified takeover bids during the sale process.

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