Irish biotech company Elan, which recently paid $1 billion to Theravance for royalty payments from sales of Breo (Relvar) Ellipta and other inhaled drugs, has been awarded an injunction against Royalty Pharma by an Irish court. The order restrains Royalty Pharma from distributing a proxy statement to Elan shareholders.
Royalty Pharma has been seeking to acquire Elan for several months prior to Elan’s deal with Theravance, initially offering $11 per share. The offer currently stands at $12.50 per share, an amount that Elan says “substantially undervalues Elan,” particularly given that “Elan’s recently announced transactions further widen the gap between Royalty Pharma’s undervalued offer and the fair value of Elan shares.”
Royalty has stated that it “believes that Elan dramatically overpaid in the Theravance Transaction by agreeing to pay US$1 billion for 21% of selected royalties owned by Theravance when all of Theravance was trading at US$3.5 billion.” Royalty has said that approval of the Theravance deal a the upcoming extraordinary general meeting of Elan shareholders on June 17 will result in withdrawal of its offer, and it has been urging shareholders to use its proxy card to vote against approval of that deal and others.
Elan has responded that, “Theravance aligns Elan with GSK, the respiratory market leader, and allows Elan to benefit from four late stage and very high quality respiratory programs.”
Elan is also seeking an injunction in the US.
Read the Elan press release.
