Lundbeck may have revived its interest in Elan
KELLY MARTIN: Approaches from potential buyers
Sunday January 18 2009
Danish pharmaceutical firm Lundbeck is understood to be interested in acquiring €4bn Irish drug group Elan.
Last week, Elan revealed that it had appointed Citigroup to advise it on "strategic review" of the company's options. These include the sale of the company, a merger or the sale of a stake in the business. Pfizer had been strongly linked with an approach for Elan, although last week the Sunday Independent revealed that the existence of a "poison pill" arrangement could deter Pfizer from making a bid. Both companies subsequently denied that they were in talks.
It is thought that Lundbeck may have been interested in acquiring Elan some time ago, although no formal approach was made. Last week, Elan chief executive Kelly Martin revealed that the company had received a number of informal approaches from potential buyers.
Elan's MS drug Tysabri is considered to be its key attraction, although Alzheimer's drug Bapineuzumab may be of particular interest to Lundbeck, which has invested heavily in the area. Lundbeck declined to comment on an approach last week. Wyeth and Biogen have also been linked with the company.
Elan has over €1.1bn in debt that must be refinanced by 2011. The company was forced to cancel the planned €1bn sale of its EDT drug unit after the collapse of Lehman Brothers. The drug company, which was set up in an Athlone house by entrepreneur Don Panoz to make nicotine patches, continues to lose money.
Investors have reacted badly to Elan's dismal stock price performance. Shares in the drug firm fell 70 per cent last year. The company has defended itself against allegations that it was wasting too much money on executive jet transport. Elan rolled out a restructuring plan just before Christmas which saw it shut offices in New York and Tokyo in a bid to shave $25m off its cost base.
- Nick Webb
