Alkermes deal will boost sales by up to $20m a year
The new owner of Elan's Athlone-based drug manufacturing facility, Alkermes, expects to generate additional sales of between $15m (€11m) and $20m a year by 2016 under the terms of a new deal signed with one of the world's leading pharmaceutical giants.
Alkermes revealed the contract as it began its first day of business as an Irish-headquartered entity following its near $1bn acquisition of Elan's drug technology unit (EDT).
Alkermes, which had been based in Massachusetts, has shifted its corporate HQ to Dublin. The deal with an undisclosed client will see Alkermes manufacture the customer's finished drug product in Athlone.
Elan announced back in May that it was selling its EDT business to Alkermes for $960m. Under the terms of the transaction, Elan obtained $500m in cash and also retained a 25pc stake in a new Alkermes entity established as a result of the acquisition.
Based on Alkermes' $1.5bn market capitalisation yesterday, that holding is currently worth $515m.
Elan is using part of the cash proceeds to begin paying down its debt pile. It's also expected to begin a steady divestment of its Alkermes stake once a lock-in period ends in about six months' time. Alkermes plc is listed on the Nasdaq.
Richard Pops, Alkermes' chief executive, has said that while he would be interested in listing on the Iseq in Dublin, such a plan would be a longer-term ambition. He has also had meetings with Enterprise Ireland regarding possible additional investment in the Athlone facility, which employs 450 people.
Mr Pops added that Alkermes was "excited" to have the firm's operations based in Ireland. The former head of EDT and Elan's previous executive vice president, Shane Cooke, has already joined Alkermes as its president.
Mr Pops expects Alkermes' revenue for the financial year ended next March to rise to between $460m and $480m, while earnings before interest, tax, depreciation and amortisation will be between $70m and $80m.
Apart from manufacturing other companies' drugs, Alkermes also has its own drug development programme, focusing on the treatment of diabetes, cocaine and alcohol addiction, as well as pain management. It is currently seeking development partners for some of its products.