The sale, which values EDT at $960m (€660m), will see its range of delivery technologies, contract manufacturing business and in-house drug portfolio merge with Alkermes to form a new organisation in which Elan will hold a 25 per cent stake.
Elan has tried to sell the unit twice in the last few years, but on each occasion it failed to find a buyer as a result of "unfavourable market conditions."
Whether today’s sale means conditions have changed or that Elan has simply accepted a lower bid for EDT is unclear as the firm has never said publicly how much it wanted for the unit.
However, the $960m price tag is well below the $1.4bn Elan was rumoured to have been looking for when it first floated the idea of a sale in 2008.
Elan spokeswoman Fidelma Callanan told in-Pharmatechniologist.com that: “Today’s transaction is taking place at a time when both businesses are strong and positioned for growth.
“Together Alkermes and EDT will create a growing, global CNS company with an exciting future based portfolio of products, pipeline and proprietary technologies.”
She went on to explain that EDT’s service and supply contracts will not be affected by the divestiture adding that Elan will ensure clients are “kept informed of progress of the transaction.”
Callanan also indicated that Elan will continue to play a role in the contract manufacturing services division that EDT launched in last year.
“In terms of the manufacturing services business, we will continue to promote and seek business, which has been very successful in attracting business opportunities since we launched the new service last October.”
This echoes comments made by EDT vice president of manufacturing services operations Philip Pratten during an interview with Outsourcing-pharma.com at Interphex last month.
News of the deal, which is due to complete in September, was well received with observers suggesting that it is good for Elan with regard to its strategic objectives.
Adrian Howd, from Berenberg Bank in London told Businessweek that it’s a good deal for the Irish drugmaker explaining that EDT “has never been the crown jewel at Elan. This enables them to restructure the business and to focus on the key value drivers.”