Drug deal worth $30m for Elan

AN Elan subsidiary will make up to $30 million (€21m) over two years after a drug made using its trademarked NanoCrystal technology was approved by the US Food and Drug Administration (FDA).

John & Johnson subsidiary Janssen Pharmaceutical has developed a drug to help treat schizophrenia using technology licensed from Elan Drug Technologies (EDT), the drug technology, delivery and R&D arm of the Irish pharmaceutical firm

The drug, an injectable formulation called Invega Sustenna, is the fifth FDA-approved licensed product using NanoCrystal technology available on the market.

But it is the first injectable treatment; the rest are oral formulations.

“This is positive for Elan Drug Technologies, as not only does it bring a drug with relatively strong potential on to the market, it is also the first long-acting injectable product using NanoCrystal technology to reach the market,” commented Goodbody Stockbrokers analyst Ian Hunter.

Elan added that EDT, which was the subject of disposal talk up until last month, will now receive milestone payments relating to the approval of the new Janssen drug, plus royalty payments on net sales.

While the company did not give any estimate as to the value of these proposed payments, Goodbody Stockbrokers said that they could amount to around $10m next year and $20m in 2011.

Last year, sales of products using EDT’s NanoCrystal technology amounted to more than $1.8 billion.

At Elan’s annual general meeting last month, chief executive Kelly Martin said the pharmaceutical company now had no plans to offload the EDT division, as it is “a very good business” which management would like to grow. He added that the board would now “figure out how best to invest in its growth opportunities”.

Elan shares were down by 1c at €5.68 in Dublin trading, yesterday.