Elan continues with divestment strategy
Troubled Irish firm Elan Corporation has sold two of it drug formulations - Actiq and Abelcet - in a bid to correct its balance sheet and raise US$1.5bn (€1.5 bn) by the end of next year. Its joint venture with Elite Pharmaceuticals has also been terminated.
The rights to its pain medication, Actiq, are being sold to US company Anesta Corporation, for $50m (€51m) in cash. The deal entitles Anesta, which was acquired by Cephalon in October 2000, to sell the product in 12, principally European, territories. Cephalon already markets the product in the US. In the first six months of 2002, Elan recorded net revenue for Actiq of $800,000 (€815,217).
Elan has also sold its anti-fungal medication, Abelcet, to US company Enzon, for $370m (€377m). Included in the transaction is related intellectual property, carrying a value of $200m (€204m), Elan's manufacturing facility in Indianapolis, Indiana, valued at $12m (€12.2m) and inventory worth an estimated at $8m (€8.2m) at time of closing. The Indianapolis facility manufactures Abelcet and Myocet and the two companies will enter into a long-term manufacturing and supply agreement whereby Enzon will continue to manufacture Elan's requirements for these two products. In 2001, Elan recorded net revenue for Abelcet in the US and Canada of $69.1m (€70.4m). The product has yet to be launched in Japan.
Elite Pharmaceuticals has also acquired Elan's interest their joint venture company, Elite Research. Elite now owns 100% of the company and intends to expedite the commercialisation of the products that were developed within the collaboration. The joint venture has completed the initial Phase I study for its first product, a once-a-day Oxycodone formulation, and has also been developing a product in the CNS therapeutic area. Elite Research has agreed to pay Elan a royalty on certain revenues that may be realised from the once-a-day Oxycodone product developed by the joint venture.
Elan slipped into the doldrums this year after the US Securities and Exchange Commission began an investigation into the firm's accounting practices. It recently reported second quarter net losses in excess of $800m (€815m) compared with a net income of $134m (€137m) for the same period of 2001.