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Biogen gains full rights to Tysabri in $3.25bn deal with Elan

Ends decade-long partnership for MS drug

Biogen Idec Tysabri

Biogen Idec will gain full rights to multiple sclerosis (MS) drug Tysabri after agreeing a deal worth at least $3.25bn with co-marketers Elan.

The two companies originally began their partnership more than a decade ago, agreeing to split profits 50/50 once it was approved for use for adults with relapsing-remitting MS (RRMS).

Tysabri (natalizumab), which made more than $1bn for each company during 2012, doesn't come cheap for Biogen, however, and on top of an upfront cash payment worth $3.25bn, Elan is due several further financial benefits.

These include royalties of 12 per cent on global net sales for the first 12 months after the deal and a tiered royalty structure after 12 months when Elan will be entitled to 18 per cent on all sales up to total revenues of $2bn and 25 per cent on sales made once Tysabri achieves revenues of $2bn.

Biogen's CEO Dr George Scangos described the deal as the “natural next step for Biogen Idec and Tysabri”, banking on the continued expansion of the drug's use, although the future for Elan is more uncertain given that Tysabri is by far the company's most important product, accounting for almost all of its revenues in 2012.

The decision is all about reducing risk, however, according to Elan's CEO Kelly Martin.

He said: “Our motivation was to diversify and de-risk the company to move forward; and for the patients to continue to benefit from the profound efficacy of Tysabri.

“The risk of one asset and a single collaborator was not ideal.”

Speaking to PMLiVE, an Elan spokesperson repeated this motivation, describing the benefits of a continued revenue stream from the royalties deal and comparing the deal to Elan's decision last year to spin-out a portion of its drug discovery business as independent biotech Prothena.

Elan has been less candid about its plans for the $3.25bn it will receive from Biogen, although CEO Martin hinted during an interview with Reuters that the acquisition of a molecule or company, as well as partnerships, were all opportunities.

Any acquisition would be low risk, said an Elan spokesperson to PMLiVE, indicating that a deal involving a late-stage product was more likely than one in early development.

7th February 2013

From: Sales

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