Elan in talks with investors over sale of drug delivery unit

BIOTECH GROUP Elan has had talks with investors about the possible sale of its Athlone drug delivery business over the last month.

It is considering splitting Athlone-based Elan Drug Technology (EDT), which develops methods for administering medicines to patients, from the biotechnology business, which is focused on developing new products.

After the company’s agm in Dublin yesterday, chief executive Kelly Martin said it had spoken to a number of potential investors in the US and Europe over the last month. The group is looking at the possibility of floating off part of EDT while it maintains a stake in the business, which it has estimated is worth €1 billion.

This is the second time in two years it has contemplated such a move. It began the process in 2008, but turmoil on world markets halted it. Mr Martin said the group first has to assess EDT’s value before taking any steps.

He emphasised that Elan is proposing the split for strategic reasons. “We would like to give EDT a chance to invest in itself,” he said. “They are doing a great job and if they had more capital, they would be able to do more things.”

Mr Martin added that it could take up to 12 months for the group to decide what it wants to do with EDT and what approach it intends to take. “Part of it is the market, part of it is the timing and part of it is the structure,” he said.

Mr Martin said Elan’s shareholders see a lot of merit in the proposal. EDT specialises in drug delivery, essentially injections, tablets and other systems for administering medicines and treatments to patients.

Elan’s focus is its multiple sclerosis treatment, Tysabri. First-quarter sales topped $290 million, slightly short of the $300 million-plus that the markets expected.

The drug has left some patients with a fatal brain condition, progressive multifocal leukoencephalopathy (PML). Elan is working to identify which patients are most at risk from this.