Elan raises €55m in new sell-off

Related tags Pharmacology

Irish pharmaceutical group Elan has raised around $70 million
(€55m) from four new deals, including the sale of formulation and
manufacturing interests.

The company has conditionally agreed to sell Elan Pharma SA, a manufacturing and research and development business based in Mezzovico, Switzerland, together with the intellectual property related to its fast-melt and effervescent dosage form technology. The name of the potential buyer has not been confirmed.

It has also sold its Segix Italia manufacturing business, based in Pomezia, Italy, to a management buyout team, as well as its offices in San Diego, US. For the latter, a multi-year rental agreement with the new owner.

Meanwhile, the company said it received a $25 million milestone payment from King Pharmaceuticals, which was contingent upon ongoing patent exclusivity for Skelaxin (metaxalone), used as an adjunct to rest, physical therapy, and other measures for the relief of discomforts associated with acute, painful musculoskeletal conditions.

These are the latest divestments in a firesale at the company, which has been going on for more than a year. Once one of the bright stars in the European pharmaceutical sector, Elan's strategy of growth by acquisition came to an abrupt end when its borrowings outstripped its capacity to service them.

The company has already hived off its entire primary care business for $750 million, and a cash call in October 2003 yielded around $570 million. And last month Elan sold four pain treatment products to US-based AaiPharma for $102 million, and a European sales and marketing business to Medeus UK for $120 million, bringing asset sales to a total of around $2.1 billion.

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