Elan, Bristol-Myers talks broke down-source
Reuters, Tuesday June 2 2009
* Talks never went beyond early stage - source
* Leak came after second suitor emerged - source (Adds details on Elan, Bristol-Myers operations)
By Ransdell Pierson
NEW YORK, June 2 (Reuters) - Irish drugmaker Elan Corp and Bristol-Myers Squibb Corp held strategic discussions last month, but they broke down in the early stages, a source familiar with the matter said on Tuesday.
"The talks were in the early stages, and never got down to price" of a potential transaction between the two drugmakers, said the source, who asked not to be named.
Another source last weekend said Bristol-Myers had been negotiating for a minority stake in Elan, which markets fast-growing multiple sclerosis drug Tysabri with U.S. biotechnology company Biogen Idec.
Elan is also developing a high-profile experimental drug for Alzheimer's disease in partnership with Wyeth, which analysts said might have helped draw Bristol-Myers' interest.
But the source on Tuesday said discussions never got far enough to focus on a potential minority stake in Elan.
"The discussions were very early on when information (about the talks) was leaked out," the source said, adding that a second suitor for Elan had appeared by that point.
The source said it was unclear whether talks between Elan and Bristol-Myers could resume at a later date.
Another source, said on Tuesday that the talks were complicated by price and Elan's drug partnerships, suggesting they were further along.
Elan and Bristol-Myers declined to comment on the matter.
In January, Elan hired Citigroup to conduct a strategic review of its business, which it said at the time could lead to a sale or merger of the company.
Elan has been under pressure from investors critical of Chief Executive Kelly Martin's leadership and the state of the biotech company, which is burning through cash at a rapid rate.
"We will not comment on the strategic review process until it's completed," Mary Stutts, Elan's senior vice president of corporate relations, said on Tuesday. "We're not going to comment about it until a deal is actually done."
Cowen and Co on Monday said a 20 percent stake at Elan's current market value would yield $800 million. The proceeds would help Elan pay down debt and finance ongoing research with partner Wyeth on experimental treatments for Alzheimer's disease, including bapineuzumab and a follow-up drug, the investment bank said.
Analysts said a deal with Elan would fit Bristol-Myers' "string-of-pearls" strategy of boosting revenue through a continuing series of small or mid-size transactions, in the $1 billion to $2 billion range.
Bristol-Myers and its chief executive, Jim Cornelius, are counting on new deals to bring enough revenue to offset sales that will be lost when Bristol's biggest product, blood clot preventer Plavix, faces generic competition in late 2011.
Its many deals in the past few years include a partnership with Pfizer Inc to develop a promising blood clot preventer called apixaban. It is also developing a diabetes drug, called Onglyza (saxagliptin), with London-based drugmaker AstraZeneca Plc. (Additional reporting by Jessica Hall and Bill Berkrot) (Reporting by Ransdell Pierson; editing by Carol Bishopri) |
