Niigata Global - Elan $6.5-Billion Takeover Offer.

(prHWY.com) March 22, 2013 - Dublin, Ireland -- Niigata Global reportedly announced in a recent meeting that Royalty Pharma have made a $6.55 billion takeover bid for Irish drug maker Elan. Royalty Pharma, a private investment management firm that specializes in pharmaceutical intellectual property, confirmed that they made first contact with Elan before putting in an offer in a subsequent meeting.

Elan recently sold the 50% stake it held in multiple sclerosis drug Tysabri for $3.25 billion to its development partner Biogen Idec, but retains royalties of 12% for the first 12 months of sales rising to 18% for the remainder of the drug's life.

Niigata Global allegedly noted that a spokesperson for Royalty Pharma stated that gaining access to the Tysabri royalties was a major motivating factor for their offer. The New York based firm owns royalty stakes in drugs such as the arthritis treatment Humira by Abbott Laboratories and a number of HIV treatments by Gilead Sciences.

Elan has plans to reinvest the proceeds of the Tysabri sale, with CEO Kelly Martin identifying a strategy to buy drugs that are already on the market, as well as some late stage experimental drugs and some early stage research projects. Niigata Global supposedly observed that some investors have expressed doubts over the strategy but welcomed the announcement that Elan plan to embark on a $1 billion share buy back scheme.

This uncertainty over what to do with the cash may help Royal Pharma to gain support for their bid. Shareholders may rebel against their lack of influence over how management will use the Tysabri cash by warming to the Royalty offer.

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