Elan plans $1 billion repurchase program post Tysabri deal closure

Ireland-headquartered drugmaker Elan Corp (NYSE: ELN) disclosed its deployment plans for the $3.25 billion upfront payment received post-closing of the Tysabri (natalizumab) collaboration with US biotech firm Biogen Idec (The Pharma Letter February 7).

About $1 billion to be used for share repurchases, and the remainder will be used as an investment in a variety of business assets and to refinance the debt. The royalty cash flow is expected to provide a high margin income for long term.

Kelly Martin, chief executive of Elan, commented: “Understandably, many market participants are looking forward to further clarity around how we intend to deploy the significant upfront payment we will be receiving from Biogen Idec upon the close of our transaction. The goal of this communication is to provide additional information to our investors.” Mr Martin continued: “We have been making significant progress in this regard and are prepared to move expeditiously, upon close, on the redeployment of capital.”