Elan, the Irish drug firm has announced it would return US$1 billion to its shareholders from the proceeds of the sale of its stake in multiple sclerosis drug Tysabri to partner Biogen Idec. Following the announcement, share prices of Elan jumped by four percent.
Also announced was the company's intention to make key acquisitions using the remaining US$3.25 billion paid for the deal.
The drug Tysabri was Elan's flagship product, where all its revenue was generated in the past years. With the divestment, analysts view an uncertainty as to the future direction and shape that the company would undertake. For now, the company is pursuing deals to cover the next year and half or so and according to CEO Kelly Martin, these business opportunities "may not necessarily be restricted to the firm's past areas of activity."
The Irish firm marketed Tysabri with Biogen, a US drug firm for the past twelve years and part of the deal includes a royalty payment of twelve percent for the first twelve months after the completion of the deal.
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