US drugmaker Perrigo moved a major step closer to acquiring Dublin-headquartered biotech firm Elan yesterday with shareholders in both companies approving the takeover at separate investor meetings.
The €6.5bn/$8.6bn deal initially agreed between the two companies in July remains on track to be completed before the end of next month.
The US firm — that country’s leading manufacturer of generic drugs — will inherit ongoing royalty payments concerning Elan’s former blockbuster drug, leading multiple sclerosis treatment, Tysabri.
It will also benefit from tax savings associated with being newly domiciled in Ireland.
Earlier this year, Perrigo’s management said the company could benefit from around $150m in annual tax savings through the Elan acquisition.
Addressing shareholders after two back-to-back meetings in Dublin yesterday morning, Elan chairman Bob Ingram noted Elan’s track record for high levels of shareholder returns and paid tribute to the company’s management team and board for their “exemplary performance in creating shareholder value” via this and other deals.
He noted the initial discovery, launch and relaunch of Tysabri; the spin-off of its drug discovery arm; the sale to Alkermes of EDT, its Athlone-based drug delivery division; the $1bn share buyback and its Alzheimer’s research alliance with Johnson & Johnson as highlights — adding that in little over 10 years, Elan has gone from having a share price of $2 to a market capitalisation of around $9bn.
Under Irish law, Perrigo’s takeover of Elan is to be completed by means of a scheme of arrangement and, thus, formal approval by the High Court, which is anticipated by mid-to-late December.
At the publication of Elan’s third-quarter earnings last month, chief executive Kelly Martin said the newly enlarged company will represent a highly unique business platform that can benefit from significant emerging trends in the global biotech sector.
Elan’s finance director, Nigel Clerkin, added that the new company has the potential to become “one of the truly great companies in this industry for many years ahead”.
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