* Elan to buy back $1 bln of shares after Tysabri sale
* Deal is "unique opportunity" to reward shareholders
* Firm still working on acquisitions with rest of proceeds
* Shares climb over 4 percent
By Stephen Mangan
DUBLIN, Feb 22 Irish drugmaker Elan will
return $1 billion to shareholders, giving them an immediate
boost from the sale of its stake in multiple sclerosis (MS)
treatment Tysabri to partner Biogen Idec.
Elan shares climbed over 4 percent following the
announcement on Friday, which also reiterated the company's
intention to make acquisitions with the rest of the $3.25
billion raised from the deal.
Tysabri was by far Elan's most important product,
responsible for almost all its revenue and its sale creates
uncertainty over the future shape of the company.
"Close to 40 percent of Elan's current market cap could be
invested in as yet unknown assets ... we are unlikely to gain
the visibility needed to become constructive on the shares until
transactions are concluded," said Deutsche Bank analyst Richard
Elan is already pursuing potential deals for the next 12-18
months, Chief Executive Kelly Martin told Reuters in an
interview this month, which he said may not necessarily be
restricted to the firm's past areas of activity.
"By unlocking a portion of the Tysabri asset value ... we
have a unique opportunity to reward shareholders, diversify our
business and create a highly distinctive business platform upon
which to advance to the benefit of shareholders and patients
around the world," Martin said on Friday.
Elan, which has operations in Ireland and the United States,
indicated last year it would look to return some profit to
shareholders from the sale of Tysabri.
The drugmaker has co-marketed Tysabri with Biogen, the
larger U.S. company, for 12 years and said it would receive a
royalty of 12 percent of Tysabri's global net sales for the
first 12 months after the deal is completed.
For Biogen, which plans to pay for the deal using existing
cash reserves, the Tysabri deal will add around $0.20 to $0.30
to 2013 earnings per share and continue to be accretive
The deal boosts its multiple sclerosis business at a crucial
time as it seeks approval for a new pill to treat the
debilitating neurological disease.