This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Alkermes to Buy Elan Unit for $960M

Stocks in this article: ALKSELN

Updated with new information throughout.

WALTHAM, Massachusetts ( TheStreet) -- Alkermes (ALKS) reached a deal to acquire Elan Drug Technologies from Elan (ELN), the Irish drugmaker, for $960 million in cash and stock.

Alkermes and Elan Drug Technologies will be combined under a new holding company headquartered in Ireland. The company will be named Alkermes Plc. and is expected to have annual revenue of more than $450 million from 25 commercialized products. Elan will have a 25% stake in the new company.

The deal joins two companies whose primary business focuses on technologies that improve the delivery of drugs made and sold by other companies. Elan Drug Technologies (EDT) formulates the once-monthly schizophrenia drug Invega Sustena sold by Johnson & Johnson (JNJ) and Acorda Therapeutics' (ACOR) multiple sclerosis medicine Ampyra. EDT generated $261 million in revenue last year, according to Bloomberg.

Alkermes is the drug-delivery technology partner for the once-weekly diabetes drug Bydureon under development by Eli Lilly (LLY) and Amylin Pharmaceuticals (AMLN). The current Alkermes is expected to record $181 million in revenue in the fiscal year ended March 31, most of which comes from royalties derived from Risperdal Consta, another schizophrenia drug marketed by J&J. More recently, Alkermes has started to develop and market its own drugs, including Vivitrol, used to combat alcohol and opioid dependence.

Alkermes loses money today but will turn cash-flow positive and profitable with the acquisition of the EDT business," the company said. On a pro forma basis, revenues are expected to grow in fiscal year 2012 with adjusted earnings in the range of $70 million to $90 million.

The new Alkermes will be led by current Alkermes chief executive Richard Pops. Shane Cooke, currently executive vice president and head of EDT, will join Alkermes as president.

"Both companies have a proven track record as innovators. This merger will bring the scale and resources for strategic and balanced investment across the whole product continuum, from R&D innovation to clinical development, to world-class manufacturing and commercial expansion. We're looking forward to working with the EDT team to accelerate growth and to create value for our shareholders and the patients we serve," said Pops, in a statement.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,614.81 +215.14 1.31%
S&P 500 1,941.28 +37.27 1.96%
NASDAQ 4,419.4780 +103.4040 2.40%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs