Decision on Elan subsidiary delayed

A DECISION regarding the future status of Elan’s drug-delivery business – Elan Drug Technologies (EDT) – may not be made until next year.

Last month, the Dublin-headquartered pharmaceutical firm announced it was re-examining the possibility of separating its Athlone-based subsidiary from the main group in order to give it a necessary injection of fresh investment.

It stressed that when it considered something similar in 2008, the idea was purely financially driven; but that since Johnson & Johnson invested in the company last year, such a move for EDT would now be based on the strategic benefits.

Speaking yesterday, after Elan’s annual general meeting, chief executive Kelly Martin said management has spoken to a number of existing investors regarding EDT, but that a decision wouldn’t probably be taken for a number of months – adding that a final outcome will be arrived at “within the next 12 months”.

He added, however, that management’s preferred outcome would still be for a partial public listing of EDT in Dublin – and one other international stock market – as opposed to a trade sale.

“Our assessment of EDT is still in the early days, but we are committed to growing the business. It has good prospects for future growth, but needs investment capital,” Mr Martin said.

He added that initial meetings with shareholders/investors showed an across-the-board support for a partial flotation of the EDT business.

Shareholders were also told management remains confident of further customer growth levels for Elan’s headline multiple sclerosis treatment, Tysabri. However, the company has not reinstated any fixed medium-term customer targets for the drug after giving up hope of achieving 100,000 users by the end of this year.

Management hasn’t, however, given up hope of achieving that figure in the long-term.

Elan also said it is confident about finalising a new chairman, as a replacement for the outgoing Kyran McLaughlin, by September or October.

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