Elan May Sell Equity Stake, Tysabri to Pay Debt
Elan Corp. is considering selling its stake in multiple sclerosis drug Tysabri, its only moneymaker, or a piece of the company to pay debt and fund research, Bloomberg reported.
"The preferred structure is to sell a minority equity position in the business," Chief Executive Officer Kelly Martin said on a conference call today after the Irish drugmaker surprised analysts by reporting a profit. Cash from such a deal would be used to pay debt and fund research, he said.
Elan will have $200 million in cash at the end of this year, about half the amount at the end of 2008, and needs money for the final and most expensive tests of drug candidates to treat Alzheimer's disease. The company, whose shares slumped 72 percent in 2008, last month appointed Citigroup Global Markets Inc. as an adviser on strategic options including a possible merger or sale.
"Everything is on the table," Chief Financial Officer Shane Cook said on an earlier call with reporters. That includes the company's venture with Biogen Idec Inc., of Cambridge, Massachusetts, on Elan's only revenue-generator, the MS drug Tysabri, and its Alzheimer's partnership with Wyeth, of Madison, New Jersey, Cook said.
Elan is in talks with Biogen "on a daily basis," Cook said. He declined to elaborate on specific discussions about selling Tysabri.