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UPDATE 2-Elan says market will not sink EDT spin-off again

* Says under less financial pressure this time around

* Global financial crisis scuppered 2008 attempted sale

* Chairman surprised at opposition to reappointment

(Adds quotes from executives, shares)

By Padraic Halpin

DUBLIN, May 27 (Reuters) - Irish drugmaker Elan ELN.I said market instability would not sink a second attempt to spin off its Elan Drug Technologies (EDT) unit after it failed to sell the drug delivery division in 2008 for that very reason.

The sale of EDT, which analysts said could be worth close to $1 billion, was scuppered at the height of the global financial crisis. Elan said its latest plan -- to form two separate companies of BioNeurology and EDT -- was not driven by the same financial pressure nor was it as time-sensitive after Johnson & Johnson JNJ.N invested $885 million for an 18.4 percent stake in the company last year.

“When we looked at this in 2008, it was more financially driven. We didn’t have the financial resources that we now have having done the transaction with Johnson & Johnson,” Chief Financial Officer Shane Cooke told a news conference after a shareholder meeting on Thursday.

“The focus this time is more on strategic benefits, therefore it is not something you have to do in a certain time frame because of a financial obligation.”

However Chief Executive Kelly Martin said that if the Dublin-based company could not get the value it wanted from the deal, it would not proceed.

“Obviously it doesn’t help when we’re talking to them (investors) that screens are red with huge, negative numbers,” he added, referring to the recent global sell-off.

Shares in Elan, the co-marketer of blockbuster multiple sclerosis drug Tysabri, rose 2.8 percent to 4.32 euros at 1250 GMT after earlier dropping to a seven-month low.

SHAREHOLDER DISQUIET

Martin said the company had so far had “almost universally” positive discussions with 50 investors, including hedge funds, mutual funds and pension funds, and he estimated that if any move were to happen, it would do so over the next 12 months. “This is a multi-month process, we can’t really time the IPO market. We presume that the markets will have stability some time in the future, whether it’s three weeks from now or three years from now,” Martin said.

Elan announced last month that Kyran McLaughlin would retire as chairman and McLaughlin said he expected a replacement to be chosen by September or October.

McLaughlin had to put himself forward for re-election at Thursday’s meeting and -- along with another director -- was opposed by an unusually large 28 percent of shareholders.

“We don’t know who they are but we will look to meet with them and find out why. We were surprised with the level of vote against us,” McLaughlin told the meeting.

Elan's shareholders have voiced disapproval of the board in the past and director Jack Schuler, a former Abbott Laboratories ABT.N executive, called for Martin to resign before he was appointed to the board last year. [ID:nnN11520690] (Editing by Jon Loades-Carter)

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