Elan Corporation, the Irish pharmaceutical firm has entered into an agreement on royalties to alleviate concerns about its acquisition strategy as well as be able to blunt the takeover bid of Royalty Pharma. The agreement is said to be worth US$1 billion.
Elan has continued to fend off the buyout advances from the US$5.7 billion bid of Royalthy Pharma and one way is to purchase 21% of royalties that Theravance is receiving from GlaxoSmithKline for its respiratory medications.
The company is expanding its portfolio from its neurological focus after it sold nearly 50% of its interest over Tysabri, the multiple sclerosis treatment drug to US partner Biogen Idec last February. The cost of the transfer is US$3.25 billion plus royalty rights.
Royalty Pharma, for its part has been wanting ownership over those royalty rights, projected to be worth hundreds of millions of dollars to its current portfolio of royalty streams. It has even caused tension with Elan Corp shareholders, questioning the management teams ability in signing bigger deals for its shareholders benefits.
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