Elan Reports Third Quarter 2012 Financial Results
During the first quarter of 2012, the remaining $57.6 million of the initial $500.0 million funding commitment provided by Johnson & Johnson to Janssen AI was utilized and as a result, Elan provided funding of $48.7 million to Janssen AI during the second quarter of 2012. In addition, Elan provided further funding of $28.2 million to Janssen AI on October 1, 2012. Following the provision of this funding, Elan’s remaining funding commitment to Janssen AI is $123.1 million. Elan recorded a net loss of $27.7 million on the equity method investment in the third quarter of 2012, relating to its share of the third quarter losses of Janssen AI.
On August 6, 2012, Johnson & Johnson issued a press release announcing the discontinuation of the development of bapineuzumab intravenous in mild to moderate Alzheimer’s disease based on the co-primary clinical endpoints not being met in the Janssen AI-led Phase 3 clinical studies (Study 301 and 302). As a result of the discontinuation, Elan recorded a non-cash impairment charge of $117.3 million against the carrying value of the equity method investment in Janssen AI during the third quarter of 2012, representing the full carrying value of Elan’s 49.9% share of the Janssen AI AIP assets.
Elan made a $20.0 million equity investment in Proteostasis Therapeutics, Inc (Proteostasis) in May 2011, which represents approximately 24% of the equity of Proteostasis. The net loss recorded on the equity method investment in the third quarter of 2012 was $0.8 million.Discontinued Operations Neotope In August 2012, Elan announced its intention to spin-off to shareholders a substantial portion of its drug discovery business platform into a new, publicly traded company incorporated in Ireland. Elan intends to commit $120-$130 million of start-up capital to Neotope, and to retain a 14%-18% minority equity position. The Neotope business is focused on the discovery and development of novel antibodies for the potential treatment of a broad range of diseases that involve protein misfolding or cell adhesion.
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