Cantillon: Patching up pharma relationships

When Elan put itself on the market after its bruising battle with Royalty Pharma, US over-the-counter medicines group Perrigo seemed to appear out of nowhere to offer the company an alternative and more profitable exit from independent existence.

But Perrigo was not unknown to Elan. In fact, the companies’ connections go back 15 years and involve the product for which Elan first made a name for itself – the nicotine patch.

The patch was the brainchild of Elan founder Don Panoz, and was the reason for his establishment of a drug-delivery business in Athlone when he first arrived in the country to found Elan.

Initially the patch was a prescription product but, in 1999, Elan and its US partner, a then unheralded company called Perrigo, announced they had secured FDA approval to change the status of the patch to an over-the-counter product. And Perrigo secured the rights to market and distribute the patch in the US. The Elan executive behind the move was one Seamus Mulligan, then president of Elan Pharmaceutical Technologies.

A few years later Mulligan was credited with saving the company from collapse by masterminding an ambitious $2 billion asset sale programme.

Mulligan noted the irony of Perrigo returning all these years later to buy in its entirety the company which had effectively sold its cast-off product to it in 1999 when he addressed students this week at an entrepreneur’s day run by Trinity’s Biomedical Sciences Institute.

“Entrepreneurship is a bit like a migraine,” he said. “As you’ll know if you’ve ever had one, it’s fuzzy around the edges but clear at the core.” He advised wannabe start-ups to be focused on their project, not diverted by minor issues.

It’s clearly worked for Mulligan, who founded the very successful Azur Pharma on leaving Elan in 2004. When it was sold on to Jazz Pharma last year he held a 10 per cent stake in the merged entity which was worth over €100 million shortly after the deal closed.