Biogen Idec Inc. has agreed to purchase Elan’s interest in Tysabri (natalizumab) and upon closing will gain full strategic, commercial and decision-making rights to Tysabri. Upon the closing of the transaction, the previous collaboration agreement between the companies, whereby worldwide Tysabri profits were split 50/50, will be terminated along with the agreement’s change of control provisions.
Under the terms of the agreement, Biogen Idec will use its existing cash reserves to make a payment of $3.25 billion to Elan upon the closing of the transaction and make future contingent payments to Elan in an amount equal to 12% of global net sales of Tysabri for the first twelve months, and thereafter, Biogen Idec will continue to make contingent payments of 18% on annual global net sales of Tysabri up to $2.0 billion and 25% on annual global net sales that exceed $2.0 billion. In 2014 only, the $2.0 billion threshold will be pro-rated for the portion of 2014 remaining after the first 12 months expires.
Biogen Idec anticipates the transaction will be approximately $0.20 to $0.30 accretive to 2013 GAAP earnings per share and $0.50 to $0.60 accretive to non-GAAP earnings per share, and will continue to be accretive thereafter, depending on the sales trajectory of Tysabri.
“This is a natural next step for Biogen Idec and Tysabri, and it underscores our deep, long-term commitment to improving the lives of MS patients around the world,” said George A. Scangos, chief executive officer of Biogen Idec. “Tysabri is a remarkably efficacious drug, and with the increased awareness of our risk stratification capabilities, we believe MS patients’ use of Tysabri will continue to expand over the long-term. Full ownership will improve our ability to navigate its role as part of our leadership in MS. We appreciate Elan’s tremendous partnership and the productive approach to our discussions that led to a transaction that benefits the shareholders of both companies. We expect a smooth transition to the closing of the transaction.”
The transaction has been approved by the boards of directors of both companies and is subject to the customary review process under the Hart–Scott–Rodino Antitrust Improvements Act in the United States and other customary review processes. The transaction is expected to close by the end of the second quarter, assuming a standard regulatory approval timeframe.
Centerview Partners LLC is acting as exclusive financial advisor to Biogen Idec. Ropes & Gray LLP is acting as legal counsel to Biogen Idec.
Tysabri is approved in more than 65 countries. Tysabri is approved in the United States as a monotherapy for relapsing forms of MS, generally for patients who have had an inadequate response to, or are unable to tolerate, an alternative MS therapy. In the European Union, it is approved for highly active relapsing-remitting MS (RRMS) in adult patients who have failed to respond to beta interferon or have rapidly evolving, severe RRMS.
Tysabri is marketed and distributed by Biogen Idec Inc. and Elan Corporation, plc.
Biogen Idec uses cutting-edge science to discover, develop, manufacture and market therapies for serious diseases with a focus on neurology, immunology and hemophilia.
Elan Corporation, plc is a neuroscience-focused biotechnology company committed to making a difference in the lives of patients and their families by dedicating itself to bringing innovations in science to fill significant unmet medical needs that continue to exist around the world.