Elan Corporation, plc, a neuroscience focused biotechnology company, has  announced that its board of directors has approved the spin-off of the discovery science and Neotope Biosciences from the company. Completion of this transaction will create two independent, highly focused, public companies that will enable investors to align timelines, risk and returns in order to best achieve their investment objectives.

The two companies will be:

Elan Corporation plc: A focused business that will generate growth; immediate and long term profits; and expanding margins. Additionally, this profitable business will be able to utilize our advantageous tax structure and create incremental after-tax earnings to the direct benefit of shareholders.

Initially consisting of three main assets: Tysabri (marketed in collaboration with Biogen Idec) for Multiple Sclerosis (MS) and other potential indications; ELND005 a small molecule asset that is phase 2/phase 2b ready in a range of neuropsychiatry and symptomatic diseases that targets non-amyloid pathologies; and lastly, the continued interest in Janssen AI which with Pfizer manages the on-going AIP portfolio including Phase 2 Bapineuzumab (subQ); phase 2 vaccine (ACC-001) and phase 1 AAB-003 (mab).

Neotope Biosciences plc: Drug discovery business platform, originally established in 2010, focused primarily on identifying and translating targets into potential therapies for chronic degenerative and other related disease areas. This entity will continue to focus on innovation, differentiated scientific advancement, unique intellectual property creation and translational capability to transform science into clinical assets.

Completion of the spin-off is subject to conditions, including approval by our shareholders and by holders of our 2016 Notes, which the Company will be seeking as soon as is practical. Additional details of the proposed spin-off, including proportionate shareholding and separate financial information relating to both Elan and to Neotope Biosciences will be provided to shareholders. If the transaction is effected, we expect there to be a separate listing of Neotope Biosciences on a U.S. exchange, by the end of 2012. Elan will incur a charge upon completion of the transaction.

“This is a bold and logical strategic step as it provides shareholders with the ability to delineate risk, timelines and business characteristics to their own specific investment objectives. As we have done over the past decade and will continue to do in the future, the strengthening of the balance sheet, capital structure, income statement and progression of the science for the benefit of patients, has been a constant goal and objective of the management team and supported by the board of directors,” said Robert A. Ingram, chairman of Elan and Kelly Martin, CEO. Messrs. Ingram and Martin added that, “All of our previous actions, including most notably the separation of the Elan Drug Technologies business and its merger with Alkermes plc as well as the establishment of Janssen AI with Johnson & Johnson in a sharing of the risk/reward around the AIP asset, have been designed to improve the risk/return profile of the company, cluster businesses and assets logically for shareholders.”

Martin commented further, “By establishing Neotope Biosciences and Elan as distinct businesses – each with its own specific business characteristics and dynamics - we provide investors with important clarity, transparency and choice as it relates to their investment decisions.”

“For Elan Corporation, plc, the completion of this transaction is a natural progression and final step to becoming a company that generates both profits and growth to the benefit of stakeholders. The dominant focus will be broadening and deepening patient access to Tysabri on a global basis and registering ELND005 for multiple indications in neuropsychiatry and other symptomatic indications. This move to immediate profitability will enable us to utilise the benefit of the significant accumulated losses that have been built up over the years. We intend to explore ways to share this benefit with our stakeholders through some combination of debt repurchases, share buy backs, dividends or all three. Further communication on this topic will be forthcoming in the months ahead and upon completion of the transaction,”Martin added.

“With Elan’s commitment to capitalize Neotope’s Bioscience, our highly talented scientific team who have previously discovered Tysabri and an approach to immunotherapy for Alzheimer’s, will have the resources and time to advance programs for chronic degenerative diseases, such as synuclein for Parkinson’s disease, along the drug development stages and provide opportunities for investors to participate in this journey”, said Dr. Lars Ekman, chairman designate of Neotope Biosciences. Dr. Ekman continued, “In the longer term, the team’s heightened focus and dedication to translating unique scientific insight into clinical programs will provide benefits to the field of life sciences across a broad array of diseases for the ultimate benefit of patients. With this transaction, their successes and insights are expected to provide enormous benefit to the world.”