Elan sells drugs portfolio for $103 million

Pharmaceuticals company Elan has announced a further asset disposal with the sale of four pain products to US group AaiPharma for $103 million (€87 million).

The sale comes just a day after company chief executive Mr Kelly Martin told shareholders at the group's annual general meeting that the asset disposal programme would shortly be coming to an end.

Elan will receive a cash payment of $51.6 million for the products and related assets. This includes payment of $3 million for stocks of the drugs already held by Elan.

AaiPharma will also assume $51.4 million of Elan's product-related payments in relation to the four treatments.

The products included in the deal are Rozicodone, Oramorph SR, Roxanol and Duraclon

Elan said the portfolio of drugs accounted for net sales of $59.8 million last year, generating profit of $40.8 million before sales and marketing costs or amortisation are taken into account. Elan said it expected to make a pre-tax gain of about $30 million on the deal.

Three of the drugs, one of which was first approved in 1984, were acquired in mid-2001 from Roxane Laboratories.

Mr Martin said the sale was part of the group's divestiture programme "to simplify and refocus the company" and brought the proceeds of the scheme to almost $1.9 billion, comfortably ahead of the $1.5 billion target the company set for asset disposals in 2003.

Elan remains committed to research and development in speciality treatments for severe pain, he said. "The completion of the divestment of this and other non-core assets will give us greater ability to focus on our key therapeutic areas." Elan expects to conclude the deal by the end of the year.

AaiPharma chief executive Mr Philip Tabbiner said the acquisition would be earnings enhancing from the outset.

"These products are an excellent fit with our current sales and promotion focus and, upon completion of the transaction, will provide us with added depth in the $4.5 billion moderate to severe pain category," he said.