Elan in $55m migraine drug deal

ELAN CORPORATION is selling the North American marketing rights for its Frova migraine product back to British biotech group Vernalis Plc for some $55 million.

Elan said it would use the proceeds of the sale to prepare for the launch of two other drugs, Antegren and Prialt, while Vernalis said the deal would boost its presence in a US migraine treatment market worth nearly $3.0 billion. Elan has been marketing Frova, a prescription medicine used to treat migraine attacks, in the US since it originally bought the rights from Vernalis in the late 1990s.

It netted $37.5 million in revenue from Frova in 2003, with gross profit of $8.1 million.

It has targeted the drug at hospital neurologists only, while Vernalis says it plans to market it more widely. “While in the neurology area they (Elan) have done very well, the view is that there’s much greater untapped potential for the product,” said Vernalis chief executive officer Simon Sturge.

Sam Fazeli, analyst at Nomura in London, described the deal as good news for Vernalis. “The company should be able to get a much more lucrative deal than it had with Elan.”