Elan and Proteostasis partnership

Elan Corporation has announced it is to partner with Proteostasis Therapeutics on a platform to discover and develop small molecule drugs and diagnostics for the treatment of neurodegenerative disorders.

Elan will pay Proteostasis $20m to develop the initiative, which will make use of Proteostasis' unique discovery technology, with disease targets including Parkinson's disease, Huntington's disease and multiple sclerosis.

There will also be an opportunity for Proteostasis to receive an additional $30m in collaboration funding over the next five years.

Elan will become a 24 per cent shareholder in Proteostasis and will have the right of first negotiation to license compounds emerging from the partnership excusively.

Kelly Martin, CEO of Elan, said: "This initiative with Proteostasis reinforces our commitment and strategic business objective of being an exceptionally high-calibre, science-driven company and provides a multitude of opportunities for Elan to advance its position as a world leader in the broad field of neuroscience."

He continued: "Importantly, and given the construct of the deal as a capital investment, this transaction is being consummated in a manner that will have a minimal near-term financial impact on our income statement and enable shareholders to realise the benefits of the operating leverage, embedded into our business, that combines expected double-digit revenue growth with a stable and well defined overall cost structure."