DRUG company Elan stepped up its bid to stave off a takeover bid by agreeing to a $1bn deal to buy a fifth of the royalties that US company Theravance receives from GlaxoSmithKline for its respiratory drugs.
The Dublin-based company, which also has operations in Athlone, has rejected a $5.7bn bid from Royalty Pharma and is fightling back the hostile takeover approach with a series of moves.
Today’s deal will see Elan spend some of the $2bn it has at its disposal following the sale to US firm Biogen Idec of its 50pc share in multiple sclerosis drug Tysabri. Elan has maintained royalty rights of up to 25pc in Tysabri, which Royalty Pharma wants to get its hands on. Elan's chief executive Kelly Martin denied that Monday's deal was designed to frustrate the Royalty bid.
"This (Theravance deal) was not done because of Royalty whatsoever. Royalty to myself, to the board, to pretty much every shareholder that we can talk to frankly is utterly irrelevant," Martin told Reuters in a telephone interview.
"I can say unequivocally that I haven't spoken to one shareholder who thinks Royalty Pharma's offer is either credible or of any substance whatsoever. We haven't talked to anybody that is on the fence."
Elan said it would pass on one-fifth of all royalties from the Theravance deal to its shareholders, matching the dividend they are already set to receive through the royalty stream Elan maintains in Tysabri following its $3.25bn sale to former US partner Biogen Idec.
Elan shareholders have until the end of the month to make up their minds on Royalty Pharma's $11.25 per share.