Elan has raised more than $70 million (Eur 59.5 million) from the sale of 6.4 million shares in Ligand Pharmaceuticals, its former partner in the promotion of Avinza, an oral form of morphine. Jane O'Sullivan, Markets Correspondent, reports.
Elan, which restructured the agreements it had with the California-based company last November, retained 12.2 million Ligand shares, subject to a 180-day lock-up period.
The lock-up expired this week and Elan filed to sell a portion of its Ligand stake, equivalent to 9.2 per cent of the company.
It retains around 5.8 million shares in Ligand, with an estimated market value of around $70 million.
Analysts welcomed the sale, although the market response to the news was muted, with Elan shares closing down 3 cents, or 0.51 per cent, in New York at $5.91.
In Dublin, they finished at Eur 5.00, down 18 cents on the day.
"This sale adds to the ever-growing cash total raised by Elan during its recovery programme," Goodbody Stockbroker said.
"At $1.7 billion, the total is already over Elan's self-set target of $1.5 billion by the end of 2003, giving increasing comfort that medium-term financial risk has been all but removed," Goodbody said.
Last November, Elan received a $100 million cash payment from Ligand for restructuring its agreement regarding Avinza.
It also received $20 million from the sale of 2.2 million Ligand shares to the company.
In return, it agreed to a reduced royalty rate from net sales of Avinza in the United States and Canada of 10 per cent - down from a previous figure of 30 per cent. Analysts are now awaiting information on further divestments, which would provide a cushion for the company heading into 2004, and Phase III data on a key drug, Antegren, in relation to the treatment of the bowel ailment, Crohn's disease.
