http://pdf.reuters.com/htmlnews/8knews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20130520:nBw195040a * Proposed Transactions offer shareholders highly unique investment and assetproposition* Acquisition of AOP Orphan - a private, orphan disease company headquartered inVienna, Austria* Acquires 48% of Newbridge Pharmaceuticals - a private Africa, Middle East &Turkey (AfMET) company, headquartered in Dubai, UAE* AOP & Newbridge together reach 20%+ of the world`s growing population andregions* Divestment of ELND005 into Speranza Therapeutics - a private and independentIrish company* Debt issuance of $800 million to optimize full potential of capital structureand markets* Share repurchase of $200 million: consistent and systematic return of capitalto shareholders* Pro-forma cash balance at March 31, 2013 of ~ $1.2 billion* Shareholder vote: June 17, 2013 at the Extraordinary General Meeting (EGM) DUBLIN--(Business Wire)--Elan Corporation, plc (NYSE: ELN) (Elan) today announces a series oftransactions designed to decisively transform and advance the company. Uponshareholder approval, the totality of these strategically driven decisions, inaddition to the Theravance royalty participation agreement and dividend passthrough announced last week and the previously completed Tysabri transaction,will form a dynamic and unique business foundation for Elan in the years ahead. CEO CommentaryKelly Martin, Chief Executive Officer of Elan commented, "Our proposed packageof transactions is designed to create a balance of risk (science, molecules,regulatory and reimbursement) with the benefit of diversification (therapeutics,geographies, science and operational constructs) to produce long-term growth inincome and value." Mr Martin added, "Our goal is to create a company that achieves distinct andsustainable success in the health care space. We are not constrained by legacyinfrastructure nor associated costs. We will operate flexible businessconstructs that allow for participation in various parts of the industry valuechain for the direct benefit of our shareholders. The resulting ability foreffective long-term planning enables us to generate significant after tax marginthrough advantageous tax structures. Lastly, the acceleration and advancementsin science, clinical knowledge and diagnostics across multiple geographiesshould continue to generate a multitude of additional opportunities for Elan toconsider in the months and years ahead." Proposed TransactionsAOP Orphan Pharmaceuticals (AOP)www.aoporphan.com * Private company, headquartered in Vienna, Austria, focused on rare and orphandiseases * Business: clinical translation and medical marketing of innovative drugs inorphan indications * Therapeutic areas: Hematology & Oncology, Cardiology & Pulmonology, Neurology,and Metabolic Disorders * Four late stage pipeline programs (2014-2018 time frame) in:Hematology/Oncology and Cardiology/Pulmonology indications * Founded in 1996 by Dr. Rudolf Widmann (formerly GSK/Wellcome) * Approximately 145 employees * 2012 Revenue:59 million (~ $76 million ); 2012 Adjusted EBITDA:15.5 million(~ $20 million)1 Elan will acquire 100% of AOP and upon close Elan will pay 263.5million for thecompany, comprised of 175.7 million in cash and 87.8 million of Elan ordinaryshares. In addition, there will be potential cash milestone payments of up to270 million on the advancement (filing and acceptance) of certain late stageclinical programs. Newbridge Pharmaceuticals (Newbridge)www.nbpharma.com * Private start-up specialty pharmaceutical company, headquartered in Dubai, UAEand focused on the Africa Middle East and Turkey (AfMET) regions * Business: specializing in in-licensing, acquiring, registering andcommercializing approved pharmaceuticals and biologics products * Therapeutic areas include oncology, immunology, metabolic disorders,gastrointestinal and CNS * Other shareholders include Kuwait Life Sciences Company and Burrill & Company * Approximately 40 employees * Joe Henein - President and Chief Executive Officer (formerly WyethPharmaceuticals) Elan has completed the first step in its investment in Newbridge by paying $40million in exchange for 48% of the total fully diluted capitalization of thecompany. In addition, Elan has appointed two Directors to the Board ofNewbridge. Elan has the option to purchase the remaining stake in Newbridge by2015 for a sum of $244 million. COO CommentaryHans Peter Hasler, Elan`s Chief Operating Officer, added "AOP Orphan andNewbridge Pharmaceuticals together create a highly unique business platform. Thegeographic markets in which they operate are characterized by underlying growthand demand for health care products, broad economic development and increasedpatient and caregiver knowledge in disease areas such as oncology,cardiovascular-pulmonology, hematology, gastroenterology, neurology and avariety of rare and orphan diseases. We look forward to working together withDr. Widmann and Joe Henein and their teams to grow, advance and leverage theirrespective business platforms." Speranza Therapeutics (ELND005) * Divest ELND005 to an independent company, Speranza Therapeutics, focused onprogressing the development of ELND005 (Scyllo-inositol) * Current indications and activity for ELND005: Bi-Polar, Agitation/Aggressionin Alzheimer`s disease, and Down Syndrome * Business objective: file in lead indication - Agitation/Aggression inAlzheimer`s disease * Third party equity financial partner will continue with clinical plans withcurrent management * Current clinical trials and operations will continue - maintaining momentum Elan will commit $70 million to the new entity upfront (plus up to a potentialfuture $8 million) for an 18% minority equity position, royalties in majormarkets along with additional milestones, and retention of commercial rights incertain territories and markets. The third party equity financial partner willcommit $20 million for 62% equity position (plus up to a potential future $2million). The remaining 20% equity will be allocated among Speranza management.This allows Elan to eliminate the operating activities associated with thedevelopment of the drug (2013 estimated spend:~ $80 million), while at the sametime maintaining a share of the potential upside. Capital Structure, Balance Sheet and Shareholder Alignment * Debt offering of $800m: optimize capital structure, maintain strategicflexibility and significant cash balances * $200 million share repurchase program planned; details to be announced * Theravance Royalty Participation Interest: 20% pass through cash dividendadded to existing Tysabri 20% dividend CFO CommentaryChief Financial Officer Nigel Clerkin added, "Upon approval and closing of thisset of transactions, the Elan business would be comprised of very high netmargin, multi asset and long term revenue streams (within Multiple Sclerosis andRespiratory), an orphan disease platform, and a strong regional commercialpresence. All of these are underpinned by a strong balance sheet as well as ahighly efficient and strategically advantageous tax structure." Shareholder ApprovalIn accordance with the Irish Takeover Rules, Elan will convene an ExtraordinaryGeneral Meeting (EGM) to be held on Monday, June 17, 2013, to obtain therequisite shareholder approval. Notice of the EGM, containing all relevantinformation, will shortly be sent to shareholders. AdvisorsElan`s financial advisors include Davy Corporate Finance, Morgan Stanley, OndraPartners, Citi, Evercore Partners and Ponthieu Partners. Elan`s legal advisorsare Cadwalader, Wickersham & Taft, A&L Goodbody, Schoenherr and Allen & Overy. Investor/Analyst Conference CallElan will host an investor/analyst conference call at 8.30am ET today. This callwill be simultaneously webcast over the internet and will be available toinvestors, members of the news media and the general public. The event can beaccessed by visiting Elan`s website atwww.elan.com and clicking on the InvestorRelations section, then on the event icon. Slides will be available onwww.elan.com at the time of the conference call/webcast. About ElanElan is a biotechnology company, headquartered in Ireland, committed to making adifference in the lives of patients and their families by dedicating itself tobringing innovations in science to fill significant unmet medical needs thatcontinue to exist around the world. For additional information about Elan,please visithttp://www.elan.com.
As required by the Irish Takeover Rules, the Directors of Elan acceptresponsibility for the information contained in this announcement. To the bestof their knowledge and belief (having taken all reasonable care to ensure suchis the case); the information contained in this announcement is in accordancewith the facts and does not omit anything likely to affect the import of suchinformation.Any holder of 1% or more of any class of relevant securities of Elan may havedisclosure obligations under Rule 8.3 of the Irish Takeover Panel Act, 1997,Takeover Rules 2007 (as amended).Forward Looking StatementsThis press release contains forward-looking statements that involve substantialrisks and uncertainties. You can identify these statements by the fact that theyuse words such as "anticipate", "estimate", "project", "target", "intend","plan", "will", "believe", "expect" and other words and terms of similar meaningin connection with any discussion of future financial performance or events.Among the factors that could cause actual results to differ materially fromthose described or projected herein are the following: risks related to delaysor difficulties encountered in obtaining, or the failure to obtain, the approvalof Elan`s shareholders for the Theravance, AOP and ELND005 transactions, thepossibility that intervening events could arise which could alter the timing, orthe ability to consummate the Theravance, AOP or the ELND005 transactions evenif Elan shareholder approval is obtained, the risk that third parties couldchallenge any or all of the transactions, even if the transactions are approvedby Elan shareholders and consummated, risks that the transactions do not providethe benefits to Elan that are anticipated, whether Elan can successfully accessthe capital markets to raise debt financing and, as Elan`s principal source ofrevenue may remain a royalty on sales of Tysabri, the potential of Tysabri,which may be severely constrained by increases in the incidence of seriousadverse events (including death) associated with Tysabri (in particular, byincreases in the incidence rate for cases of PML), or by competition fromexisting or new therapies (in particular, oral therapies), and the potential forthe successful development and commercialization of products, whether internallyor by acquisition, especially given the separation of the Prothena businesswhich left Elan with no material pre-clinical research programs or capabilities;Elan`s ability to maintain sufficient cash, liquid resources, and investmentsand other assets capable of being monetized to meet its liquidity requirements;the success of our development activities, and research and developmentactivities in which Elan retains an interest, including, in particular, theimpact of the announced discontinuation of the development of bapineuzumabintravenous in mild to moderate Alzheimer`s disease; failure to comply withanti-kickback, bribery and false claims laws in the United States, Europe andelsewhere; difficulties or delays in manufacturing and supply of Tysabri; tradebuying patterns; the impact of potential biosimilar competition, the trendtowards managed care and health care cost containment, including Medicare andMedicaid; legislation and other developments affecting pharmaceutical pricingand reimbursement (including, in particular, the dispute in Italy with respectto Tysabri sales), both domestically and internationally; failure to comply withElan`s payment obligations under Medicaid and other governmental programs;exposure to product liability (including, in particular, with respect toTysabri) and other types of lawsuits and legal defense costs and the risks ofadverse decisions or settlements related to product liability, patentprotection, securities class actions, governmental investigations and otherlegal proceedings; Elan`s ability to protect its patents and other intellectualproperty; claims and concerns that may arise regarding the safety or efficacy ofElan`s product candidates; interest rate and foreign currency exchange ratefluctuations and the risk of a partial or total collapse of the euro;governmental laws and regulations affecting domestic and foreign operations,including tax obligations; whether Elan isdeemed to be an Investment Company ora Passive Foreign Investment Company; general changes in United States andInternational generally accepted accounting principles; growth in costs andexpenses; and the impact of acquisitions, divestitures, restructurings, productwithdrawals and other unusual items. A further list and description of theserisks, uncertainties and other matters can be found in Elan`s Annual Report onForm 20-F for the fiscal year ended December 31, 2012, and in its Reports ofForeign Issuer on Form 6-K filed with the SEC. Elan assumes no obligation toupdate any forward-looking statements, whether as a result of new information,future events or otherwise.1 Unaudited Investor Relations:Chris Burns, + 1-800-252-3526orDavid Marshall, +353-1-709-4444Media RelationsEmer Reynolds, +353-1-709-4022orFTI ConsultingJonathan Birt, +44-751-559-7858orSard Verbinnen & CoJamie Tully, +1-212-687-8080 Copyright Business Wire 2013
