Date: 2011-05-09
Type of information: Company acquisition
Acquired company: Elan Drug Technologies (formulation and manufacturing business unit of Elan – Ireland)
Acquiring company: Alkermes (Ireland - USA)
Amount: $960 Million (€668.7 million)
Terms: Alkermes and Elan have announced the execution of a definitive agreement under which Alkermes will merge with Elan Drug Technologies (EDT), the profitable, world-class drug formulation and manufacturing business unit of Elan, in a cash and stock transaction currently valued at approximately $960 million. Alkermes and EDT will be combined under a new holding company incorporated in Ireland. This newly created company will be named Alkermes plc. The transaction is expected to be immediately accretive to cash earnings and accelerates Alkermes' path to building a sustainably profitable biopharmaceutical company with expertise in developing treatments for central nervous system (CNS) diseases and a broad, diversified portfolio of products and pipeline based on proprietary science and technologies.
In connection with the transaction, which was approved by the boards of Elan and Alkermes, at closing, Elan will receive $500 million in cash and 31.9 million ordinary shares of Alkermes plc common stock. Alkermes and Elan will enter into a shareholder agreement that, among other things, contains a lockup, standstill and voting agreement for Elan's shares of Alkermes plc. Existing shareholders of Alkermes, Inc. will receive one ordinary share of Alkermes plc in exchange for each share of Alkermes, Inc. they own at the time of the merger. Alkermes plc shares will be registered in the U.S. and are expected to trade on the NASDAQ exchange. The transaction is expected to be taxable to existing Alkermes, Inc. shareholders. Alkermes has obtained a commitment from Morgan Stanley & Co. and HSBC to provide up to $450 million of term loans to finance the transaction.
* On January 31, 2013, Elan has announced that, following the close of trading today, Elan, through its wholly-owned subsidiary, Elan Science Three Limited, agreed to sell, on customary terms, all of its remaining 7,750,000 ordinary shares of Alkermes plc through Jefferies & Company, Inc. pursuant to Rule 144 under the U.S. Securities Act of 1933. The sale is expected to close on February 6, 2013. In September 2011, upon the combination of Elan’s Drug Technology business with Alkermes, Inc., Elan received 31,900,000 ordinary shares in the newly created Alkermes. In March 2012, Elan sold 24,150,000 ordinary shares of Alkermes in an underwritten public offering. After the closing, Elan will no longer own any ordinary shares of Alkermes.
Details: Alkermes acquires both a strong, CNS-focused pipeline of proprietary and partnered product candidates in clinical development, including several late-stage proprietary product candidates and complementary new drug development capabilities that leverage proprietary science and innovative medicinal chemistry capabilities.
Proprietary technologies include EDT's NanoCrystal(R) technology for poorly water soluble drug compounds; EDT's proprietary technologies for oral controlled release drugs and Alkermes' long-acting injectable drug technologies; and GMP manufacturing facilities in Wilmington, Ohio, Gainesville, Ga., and Athlone, Ireland, with world-class capabilities for producing complex drug products.
Related: CNS
Pharmaceutical development
