Elan shareholders vote yes to share buyback proposal

Elan shareholders have unanimously voted in favour of the company’s share buyback plan, which will see nearly a third of the proceeds of its sale of multiple sclerosis drug Tysabri returned to investors.

Out of a total of 340m votes, 337.4m — or 99% of shareholders — were in favour of the special resolution, with just 2.6m against. Another 5.4m votes were withheld. The results of the vote were announced at the close of yesterday’s extraordinary general meeting on the matter at Dublin’s Westin Hotel.

Elan recently completed the sale of its 50% stake in Tysabri to its co-partner on the drug, US pharmaceutical firm Biogen Idec.

Biogen agreed to buy out its partner for $3.25bn (€2.48bn) and a proportion of future royalties. Elan’s share buyback will see $1bn of that figure going directly to shareholders.

It is understood Elan will receive 12% royalties on in- market sales of Tysabri for the first 12 months of the new ownership structure and, thereafter, 18% royalties on in-market sales of the drug, up to $2bn, and 25% on sales exceeding $2bn.

Elan’s shareholders are also likely to benefit from these additional payments.

Tysabri generated in-market sales of $1.6bn last year.

No shareholders had any questions for Elan’s management at the meeting, and the company made no further comment as Elan is currently in a closed period ahead of the publication of its first-quarter financial results later this month. It is in an offer period — with US investment management firm Royalty Pharma having been given a deadline of May 10 by the Irish Takeover Panel to either table a firm offer for Elan or walk away from the process for at least 12 months.

Royalty made an indicative proposal to buy the Irish biotechnology firm for $6.6bn or $11 per share, in February, which was described by Elan’s management as “heavily conditional” and “highly opportunistic” given the timing.

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