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Elan Reports Third Quarter 2012 Financial Results

As a result of the commencement of a Phase 2 study of oral ELND005 as an adjunctive maintenance treatment in patients with Bipolar I Disorder to delay the time to occurrence of mood episodes, Elan incurred an in-process R&D charge of $11.0 million during the third quarter of 2012, related to a milestone paid to Transition Therapeutics, Inc upon this event.

Net Interest and Investment Gains and Losses

Net interest expense

For the third quarter of 2012, net interest expense decreased by 48% to $15.0 million, from $28.7 million for the third quarter of 2011. This decrease is primarily due to the retirement of $660.5 million of the Company’s debt during the fourth quarter of 2011.

Debt offering and debt redemption

On October 1, 2012, Elan completed the offering at par of $600.0 million in aggregate principal amount of 2019 Fixed Rate Notes. These new notes carry a coupon of 6.25% per year, payable semi-annually in arrears beginning April 15, 2013.

On September 24, 2012, Elan announced a cash tender offer (the Tender Offer) for the outstanding $624.5 million in aggregate principal amount of 8.75% Senior Notes due 2016 (the 2016 Fixed Rate Notes). The total consideration for the Tender Offer was $1,053.34 per $1,000 principal amount of 2016 Fixed Rate Notes, plus accrued and unpaid interest to the date of payment. An additional consent payment of $40.00 per $1,000 principal amount of 2016 Fixed Rate Notes was paid to holders of the 2016 Fixed Rate Notes who tendered their Notes on or before October 5, 2012 (the early tender date). The Tender Offer expired on October 22, 2012 and holders of $580.8 million in aggregate principal amount of the 2016 Fixed Rate Notes tendered their notes, all of which were tendered on or prior to the early tender date.

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