Elan eyes more deals this year with $1 billion warchest


Elan will still have $1.2 billion of cash left to spend if shareholders approve its first package of acquisitions, and plans to announce more deals in the second half of the year, chief executive Kelly Martin said on Monday.

Elan agreed on Monday to buy Austrian rare drug specialist AOP Orphan for 263.5 million euros ($337 million) and pay $40 million for a 48 percent stake in Dubai-based sales and marketing firm Newbridge pharmaceuticals.

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That followed a $1 billion royalties deal just a week ago as the Irish company looks to fend off a takeover bid from U.S. investment firm Royalty Pharma and reshape its business following a multi-billion dollar drug sale in February.

"This isn't the end of the journey, it's the middle phase... We will have north of $1 billion remaining on our balance sheet for additional investments in the next 6-12 months," Martin told Reuters, describing the Royalty bid as "a bit of nuisance".

"We will announce further things in the second half of the year. We will look at anything at all. Royalties are almost 100 percent profit with our tax structures, so we will look at assets or royalties or both."

Martin described the AOP Orphan acquisition, which will hand Elan a number of mainly hematology and oncology-focused drugs and late stage experimental treatments, as a "critical" piece of the new Elan.

AOP, 100-percent owned by founder and former Glaxo-Wellcome executive Rudolf Widman, marks Elan's first step into the rare drug market, a niche area that does not produce the high volumes that blockbuster drugs can manage but often sustains higher pricing.

Together with the stake in Newbridge, run by ex-Wyeth Inc Middle East chief Joe Henein, the deals will also move Elan's focus to eastern Europe, Africa and the Middle East, where both companies produce and sell drugs.

"These are parts of the world that are not necessarily on everyone's radar screens. It's not China, it's not Brazil, it's not Germany, France and the U.S., but when you add them up, it's just shy of a quarter of the world's population with healthcare demand growing dramatically," Martin said.

"We believe there are significant opportunities around the world, with certain other geographic areas that we think are as interesting as AOP and Newbridge, but there are only so many things we can do at once."

(Reporting by Padraic Halpin; Editing by Richard Pullin)