Elan Corporation, an Athlone-based pharmaceutical company, will invest $27 million (€25 million) in a joint venture with US group, Isis Pharmaceuticals. The venture will develop technology for the oral delivery of "anti-sense" (anaesthetic) drugs, or genetic code blockers.
Isis will be the majority shareholder. Elan's investment will consist of $15 million of common stock purchased at a premium to the market and $12 million of convertible exchangeable preferred stock, convertible into equity in Isis, or in the new subsidiary. Elan will also receive warrants exercisable in five years.
Ms Jane Green, senior director, investor relations at Isis, told The Irish Times Isis would initially have an 80 per cent stake in the new company and Elan would own the remaining 20 per cent. If Elan were to convert all the preference stock, it would end up with a 50 per cent stake, she added. Elan's executive chairman, Mr Donal Geaney, in a statement said his group was looking forward to working with Isis, which has a leading position in anti-sense drug discovery.
"This collaboration is consistent with Elan's long-term strategy of building alliances with strong emerging technology companies."
Isis said the transaction would "create significant value for Isis stockholders. It will enable us to pool our oral drug delivery capabilities with Elan's considerable technical expertise in oral drug delivery, and provide funding for development of a promising anti-inflammatory drug".
Isis employs 375 people and was established in 1985. It gained a share quotation on Nasdaq in 1991. Isis is still at the development stage and is not yet profitable.
