Elan said mulling technology unit spin-off

DUBLIN (Reuters) - Irish drugmaker Elan Corp (ELN.I) is considering spinning off its development and manufacturing division Elan Drug Technology (EDT), which could be worth up to $1.5 billion, the Sunday Times newspaper reported.

The company is considering splitting its biopharmaceuticals arm, which markets its flagship multiple sclerosis drug Tysabri, from EDT, the paper said.

Elan (ELN.L) said EDT has been consistently profitable and an important source of financing for the firm.

"The company continues to regularly review its portfolio of businesses with a view of maximizing shareholder value," a spokeswoman said in an email sent to Reuters.

The Sunday Times, quoting unnamed sources, said Elan could boost the value of its biopharmaceuticals business by hiving off its debt of just over $1 billion into the EDT unit.

Elan last week said that its net loss had worsened to $405 million in 2007 from $267 million a year earlier, but it forecast a 30 percent rise in revenue over the coming year on rising demand for Tysabri, co-developed with U.S. partner Biogen Idec (BIIB.O).

The company, which has been recovering from a brush with bankruptcy in 2002, hopes growing demand for Tysabri, which has also won U.S. approval for treating bowel disorder Crohn's disease, will ensure a return to profitability.

The EDT unit posted adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $125.5 million, on revenue of $295.5 million for the full year 2007.

The Biopharmaceuticals division posted a loss of $155.9 million on revenue of $463.9 million.

"During the past several years, the Biopharmaceuticals and EDT businesses have been run as distinct businesses and the results have been reported separately reflecting this management practice," Elan said on Sunday.

(Reporting by Andras Gergely; Editing by Richard Hubbard)