US company backs out of Elan deal

A US company today backed out of a €785m deal to buy the primary care business unit and two brand-name drugs from the Elan Corporation.

King Pharmaceuticals of Tennessee claimed in a statement that Elan committed “various breaches and misrepresentations” involving the asset purchase agreement signed by the companies on January 30.

Under the deal, King would have acquired from Elan the rights to the muscle relaxant Skelaxin and the insomnia drug Sonata, as well as Elan’s 400-person sales staff in the US.

But King suggested last month that a Federal Trade Commission probe could jeopardise the deal.

The FTC said it was investigating whether Elan illegally suppressed competitors’ efforts to produce generic rivals to Skelaxin, which is known in its generic form as metaxolone.

Elan, which was once the most valuable publicly held company in Ireland, responded last month with a lawsuit in New York to force King to complete the deal.

The case is set for trial on May 15.