Elan Corporation plans an initial public offering (IPO) of its Athena Diagnostics unit in a move that could raise as much as $120 million (€132 million), analysts said.
The pharmaceutical group said yesterday that it had filed a registration statement with the US Securities and Exchange Commission for an IPO of Athena, a wholly owned subsidiary of Elan.
The IPO will involve the sale of only a portion of Elan's shareholding in Athena. A spokesman for the company declined to comment on the size of the stake Elan would retain.
However, Athena said it will not receive any proceeds from the sale of any shares.
It said its testing services help detect mutations in the genetic code responsible for causing Huntington's disease and certain forms of mental retardation, as well as helping to diagnose Alzheimer's disease.
The offering is expected to commence early next year. The lead underwriter is UBS Warburg LLC.
"This announcement follows on what has been a broad review of Elan's portfolio in recent quarters, combining outright product divestments and product partnering/distribution agreements," Elan's broker, Davy, said.
Athena markets diagnostic products and services to US neurologists, including markers for disorders such as Huntingdon's disease and Alzheimer's.
According to Davy, the unit generated net income of $5 million last year on revenues of just over $30 million, representing a very small share of Elan's group profits.
Elan acquired Athena Neurosciences, a leader in research and development in the area of Alzheimer's disease, for £406 million (€515.5 million) in 1996.
Alzheimer's has proved an exciting area for Elan in recent times, as news about the group's experimental vaccine for treating the disease boosted the share price.
The company has applied to trade its shares on the New York stock exchange under the symbol "DXL".
Last week Elan posted record third-quarter results, because of strong sales growth and higher margins. Its profits rose by 37 per cent to $183.5 million (€205 million).
The group reported earnings per share ahead of forecasts at 50 US cents for the three months to the end of September, from 38 cents for the third quarter of last year.
In New York, Elan's shares were up by 1.2 per cent to $46.23 at the close of business in Dublin yesterday. In Dublin, the shares closed 20 cents higher at €51.20.
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