“The offer from Royalty Pharma grossly undervalues Elan’s current business platform and our future prospects. As a result, the board unanimously — and without reservation — rejected the offer,” Elan’s chairman, Bob Ingram said.
In a statement, the Dublin-headquartered biotechnology firm said its rejection of the offer follows “careful review and consideration”, with the decision being reached with the assistance of the company’s executive management team and outside financial and legal advisers.
Earlier this month, Elan’s shareholders unanimously voted in favour of the company’s share buyback plan, paving the way for $1bn (€766m) of the $3.25bn the firm received from the recent sale of its stake in multiple sclerosis treatment, Tysabri, to former partner Biogen Idec to be returned to shareholders.
That buyback was formalised last week, at $11.25 per share, automatically reducing Royalty’s $7.3bn/$12 per share improved offer for the Dublin company. Last week’s buyback also reduced Johnson & Johnson’s stake in Elan from 18% to just under 5%.
Elan — due to publish first-quarter financial results tomorrow — added yesterday that — in accordance with Irish Takeover Panel rules — it will communicate with shareholders again following the publication of Royalty Pharma’s formal offer document. In the meantime, it has strongly advised its shareholders to take no action in relation to the Royalty offer.
New York-based Royalty first expressed interest in Elan in February, with a view to it adding the multi-million dollar royalty rights to the Tysabri drug to its portfolio of royalty streams.