Elan takes action against Pfizer

ELAN said it is seeking binding arbitration with American pharmaceutical giant Pfizer over research into a potential treatment for Alzheimer’s disease.

Athlone-based Elan said yesterday that it was taking the action to protect its rights over the research, which could eventually lead to a treatment of the disease.

The two companies entered into an agreement to co-operate on research in August 2000, but Elan said that it had terminated the agreement because it believed that Pfizer had breached some of the terms of the deal. Elan did not specify which parts of the agreement had been broken.

“Prior to taking this step we made every effort to come to a mutually acceptable resolution that would enable us to move forward either with Pfizer or independently,” Elan’s chief executive Kelly Martin said.

“As one of the world’s leading companies dedicated to the treatment of Alzheimer’s disease, Elan remains focused on changing the course of the disease in an effort to ultimately help millions of patients and their loved ones.”

The research centres on the discovery of small molecule inhibitors in beta-secretase, an enzyme thought to play a role in the development of Alzheimer’s disease.

Elan has been working on a drug for some years now and had patients taking a potential treatment. The trials had been cancelled after the drug was found to cause an adverse reaction.

Elan also announced yesterday that it will not dispose of its US-based drug delivery operations and acute care business which includes antibiotics Maxipime and Azactam.

Mr Martin said the drug delivery businesses are generating value for the company and providing opportunities for revenue growth and key technological capabilities.

“As we enter the final stages of our recovery plan, retaining these profitable businesses gives us strategic flexibility and the opportunity to optimise their value moving forward,” he said.

NCB Stockbrokers said in a note yesterday that Maxipime and Azactam had sales of around $150 million last year.

Elan is currently in talks which could lead to the sale of some of its European operations. Brokers value these businesses at around $300 million.

The company has already disposed of a number of its businesses in a bid to raise $2 billion (€1.6 billion) to pay down its debts.

The company is under investigation by the US financial watchdog, the Securities and Exchange Commission over its accounting policies.

The inquiry has dragged on for close to two years and its findings are due to be released next year.

Since the investigation began, Elan’s share price has dropped by around 90%.

Yesterday the shares were up by 1.4% on the Irish stock market at 4.76.