Biogen Idec is to take full ownership of blockbuster multiple sclerosis drug Tysabri after agreeing to pay Irish partner Elan $3.25 billion plus future royalties on sales of the drug.
The deal gives Elan strategic flexibility to buy new assets but leaves unclear the future direction of the company, since Tysabri was by far its most important product.
Sales of Tysabri, which provides Elan with almost all of its revenue, rose 8 per cent to $1.6 billion last year. A filing last month for approval to sell the drug as a first-line treatment for could boost sales further.
The Irish drugmaker has co-marketed the drug with the larger US company for 12 years and said it would receive a royalty of 12 per cent of Tysabri global net sales for the first 12 months after the deal is completed.
A tiered royalty structure will kick in after that, with Elan receiving 18 per cent on up to $2 billion of global net sales and 25 per cent on any sales over that amount.
Elan chief executive Kelly Martin said the situation of relying on one asset and a single collaborator had not been ideal and the restructuring of the Tysabri alliance would allow the group to diversify into other areas.
"The restructuring of this business collaboration provides Elan with significant strategic flexibility," he said.
"We are enthusiastic about the market opportunities around the globe and remain flexible and creative about the manner in which we would participate in those opportunities."
The deal boosts Biogen's MS business at a crucial time for the U.S. biotech company, which hopes to win approval soon for a new pill to treat the debilitating neurological disease.
Reuters
