Elan rejects Royalty bid, to evaluate other offers

Board of drugmaker Elan rejects Royalty Pharma's increased bid, will evaluate other offers

The board of directors of the Irish drugmaker Elan Corp. PLC on Monday rejected an increased offer from Royalty Pharma and says it has received unsolicited interest from other parties it didn't name.

Royalty's latest offer last week was for $13 per share plus up to $2.50 per share in payments based on performance milestones. That offer totaled about $7.76 billion not counting the milestone payments.

Royalty previously offered $12.50 per share for Elan and was rejected. Elan went to court to block the bid, but said Monday it dropped the lawsuit after Royalty made additional disclosures.

Royalty, based in New York, is a privately held company that buys royalty interests in drugs.

Dublin-based Elan also said Monday that it will evaluate other inquiries about the company and has hired Citigroup to coordinate discussions of whether those proposals fully value the company. It did not give details about the inquiries.

Elan in April sold its interest in the multiple sclerosis treatment Tysabri to former development partner Biogen Idec Inc. That deal was worth $3.25 billion in cash and recurring royalty payments.

Elan has also begun a move to diversify its business through a string of acquisitions, and Royalty has made shareholder rejection of those deals a condition for completing its acquisition offer.

Those moves, which will be voted on by Elan shareholders June 17, include acquiring a share of the royalties for four respiratory drugs from Theravance Inc., as well as acquiring AOP Orphan, an Austrian developer of treatment for rare diseases or diseases for which there are few treatments. They also include a $200 million share buyback, and the sale of an experimental drug to Speranza Therapeutics.

Elan's shares rose 18 cents to close at $13.62 Monday. Its shares have traded in a 52-week range of $9.37 to $14.80.