Biogen Acquires Full Tysabri Rights from Elan

Biogen Idec, a biotechnology company, has agreed to purchase the neuroscience-focused biotechnology company Elan’s interest in Tysabri (natalizumab), a monotherapy for relapsing forms of multiple sclerosis, and upon closing will gain full strategic, commercial, and decision-making rights to Tysabri. Upon the closing of the transaction, the previous collaboration agreement between the companies, whereby worldwide Tysabri profits were split 50/50, will be terminated along with the agreement’s change-of-control provisions.

Under the terms of the agreement, Biogen Idec will use its existing cash reserves to make a payment of $3.25 billion to Elan upon the closing of the transaction and make future contingent payments to Elan in an amount equal to 12% of global net sales of Tysabri for the first 12 months, and thereafter, Biogen Idec will continue to make contingent payments of 18% on annual global net sales of Tysabri up to $2.0 billion and 25% on annual global net sales that exceed $2.0 billion. In 2014 only, the $2.0-billion threshold will be pro-rated for the portion of 2014 remaining after the first 12 months expires.

Biogen Idec anticipates the transaction will be approximately $0.20–0.30 accretive to 2013 GAAP earnings per share and $0.50–0.60 accretive to non-GAAP earnings per share, and will continue to be accretive thereafter, depending on the sales trajectory of Tysabri.