Elan to Sell North American Rights to Abelcet for $370 Million in Cash
Wednesday October 2, 2:30 am ET
DUBLIN, Ireland--(BUSINESS WIRE)--Oct. 2, 2002--Elan Corporation, plc (NYSE: ELN - News; "Elan") has agreed to sell its United States, Canadian and any Japanese rights to Abelcet(TM), Elan's injectible amphotericin B lipid formulation, and certain related assets to Enzon, Inc. (NASDAQ: ENZN - News).
Under the terms of the agreement, which is subject to shareholder approval, Elan will receive a cash payment of $370 million which may be subject to certain price deductions at closing, which are not expected to exceed $10 million. As there are no outstanding payment obligations with respect to Abelcet, the entire proceeds from the sale will form part of Elan's targeted proceeds from the divestment of assets as outlined in its recovery plan.
"This transaction represents an important step in Elan's recovery plan and enhances our overall cash position," said Dr. Garo Armen, chairman of Elan. "We continue to promote our hospital products, Maxipime(TM) and Azactam(TM), through the remaining hospital sales force of approximately 100 representatives. We will retain our existing rights to market Abelcet in territories outside of the United States, Canada and Japan. This will be managed through our European commercial infrastructure and distributors. I am pleased to note that individuals who have contributed to the success of Abelcet, from manufacturing through to commercialisation, will have an opportunity to continue to contribute as employees of Enzon."
Included in the transaction is related intellectual property (carrying value of $200 million), Elan's manufacturing facility in Indianapolis, Indiana (carrying value of $12 million) and inventory (estimated at $8 million at time of closing). The Indianapolis facility manufactures Abelcet and Myocet(TM) and the two companies will enter into a long-term manufacturing and supply agreement whereby Enzon will continue to manufacture Elan's requirements for these two products. The 94 employees associated with the manufacturing facility and a hospital sales force of approximately 60 individuals will be offered employment by Enzon.
In 2001, Elan recorded net revenue and gross profit for Abelcet in the United States and Canada of $69.1 million and $56.4 million, respectively. For the first half of 2002, Elan recorded net revenue and gross profit for Abelcet in the United States and Canada of $44.1 million and $35.1 million, respectively. The product has yet to be launched in Japan.
To comply with the listing requirements of the Irish Stock Exchange and the U.K. Listing Authority, the transaction is subject to the approval of Elan's shareholders at a special meeting. A circular, setting out in more detail the terms of the proposed transaction and the resolution to be put at the special meeting will be sent to shareholders as soon as practicable. The transaction is also subject to regulatory approvals, third party consents and other customary conditions, and is expected to close during the fourth quarter of 2002.
Abelcet is a polyene antifungal agent indicated for serious invasive fungal infections in patients who are refractory to or intolerant of conventional amphotericin B therapy. Abelcet was developed by The Liposome Company, Inc., (which was acquired by Elan on May 12, 2000) and was approved by the U.S. Food and Drug Administration, first for aspergillosis in November 1995, and was expanded in October 1996 to include all invasive fungal infections.
Elan was advised on this transaction by Morgan Stanley & Co. Incorporated.
Elan is focused on the discovery, development, manufacturing, selling and marketing of novel therapeutic products in neurology, pain management and autoimmune diseases. Elan shares trade on the New York, London and Dublin Stock Exchanges.
This news release may contain certain forward-looking statements by Elan that involve risks and uncertainties and reflect the company's judgement as of the date of this release. Actual events or results may differ from the company's expectations. For example, there can be no assurance that this transaction will be approved by Elan's shareholders, that regulatory approvals and third party consents will be timely or successfully obtained, or that further closing conditions will be met. A further list of these risks, uncertainties and other matters can be found in Elan's Annual Report on Form 20-F for the fiscal year ended December 31, 2001, and in its Reports of Foreign Issuer on Form 6-K. Elan assumes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
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Contact:
Elan Corporation
Investors (U.S.): Jack Howarth, 212/407-5740
800-252-3526
Investors (Europe): Emer Reynolds, 353-1-709-4000
00800 28352600
Media: Sunny Uberoi, 212/332-4766
800-252-3526
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