Alkermes to buy Elan unit

US-based Alkermes is to acquire Elan Drug Technologies (EDT) – Elan's unit for drug formulation and manufacturing – for a total of around $960m, creating the newly formed Alkermes plc to be based in Ireland.

The deal has been approved by company boards, with Elan to receive $500m in cash and 31.9 million ordinary shares of Alkermes plc common stock.

Existing shareholders of Alkermes will receive one share of the new Alkermes plc in exchange for each current share owned.

The company said the deal will enable Alkermes to become a sustainably profitable biopharmaceutical company specialising in developing treatments in the field of central nervous system (CNS).

Richard Pops, current chairman, president and CEO of Alkermes, will serve as Alkermes plc's chairman and CEO. Current head of Elan Drug Technologies, Shane Cook, will become president of Alkermes plc.

Pops said: "This merger will bring the scale and resources for strategic and balanced investment across the whole product continuum, from R&D innovation to clinical development, to world-class manufacturing and commercial expansion. We're looking forward to working with the EDT team to accelerate growth and to create value for our shareholders and the patients we serve."

Cooke also commented on the deal, reference the company's future product prospects: "With EDT's two recently approved drugs, Invega Sustenna (paliperidone palmitate – for schizophrenia) and Ampyra (dalfampridine – for multiple scleroris), driving revenue growth, the EDT business is an ideal complement to Alkermes' portfolio of approved and development-stage drug."

Elan has a webcast of a conference call concerning the deal.