Cinven ends interest in Elan research arm

EUROPEAN private equity house Cinven has reportedly ended any interest it had in acquiring Irish pharmaceutical company Elan’s drug research arm, Elan Drug Technology (EDT), which is currently being hawked around the market for potential buyers.

Cinven, Apax and Kohlberg Kravis Roberts (KKR) have all shown interest in the asset, while Bain Capital and TPG made first-round bids for EDT at the end of last week.

Elan recently employed Lehman Brothers and Goldman Sachs to look at options for the future of the EDT division.

These initially included a dual stock exchange listing in Dublin and London or a sale to a private equity house.

Elan has again declined to comment on the issue and hasn’t said anything since its recent second-quarter results, when it stated that it was continuing to “evaluate all parts of the overall business on an ongoing basis”.

EDT acts as an outsourced drug technology and research business and undertakes work for a number of clients apart from the main Elan group. Elan is looking to offload the division, which is valued at around $1.5 billion (€1bn), and concentrate on its own products and biotechnology business.

Its current main revenue driver is its Tysabri drug used to treat multiple sclerosis and Crohn’s Disease, while it is also working at developing the first in a long line of Alzheimer’s Disease treatments.

Both of these products have suffered serious setbacks of late —Tysabri, in that new instances of the side effect PML (the rare brain disease that prompted the drug’s temporary removal from the market three years ago) were found in users, and the latter in that clinical trials found unwanted side effects.

Both setbacks decimated Elan’s value and share price in the last month.

Speaking after Elan’s annual general meeting earlier this year, group chief executive, G Kelly Martin said that the EDT division was continuing to show good annual growth, “has terrific potential, but would benefit from more focus and needs continued investment.”