Elan Recovery Slowed By King
King Pharmaceuticals' decision to abandon its $850 million purchase of Elan's primary care franchise is the first serious setback to the embattled Irish firm's recovery plan. But with several remaining saleable assets and a potential blockbuster in Phase III autoimmune therapy Antegren, all is not lost.
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The dynamics of specialty chronic care markets suggest that Biogen Idec and Elan's highly anticipated Antegren may have trouble turning the scrappy $3.5 billion MS market on its head, at least right away.
Mylan, one of the nation's top three generics companies, is offering to buy King Pharmaceuticals for $3.7 billion in a stock swap in order to boost its efforts in the branded pharmaceutical business. But the controversial proposal and reaction to it raises interesting questions about business models in specialty pharma, a concept that has, many ways, taken over the small-company pharma world.
Apax Partners paid $120 million for Elan's European sales and marketing infrastructure--renamed Medeus--to buy into the in-licensing game with a ready-made continent-wide commercial network. Few specialty companies can match its scope. But with little or no track record and a portfolio of mostly older, sometimes off-patent drugs, Medeus may nevertheless have to work hard to convince licensors to hand over their products.