IRSH: Elan Corporation PLC: Elan Announces Transactions: Decisively Transforming the Company

  IRSH: Elan Corporation PLC: Elan Announces Transactions: Decisively
  Transforming the Company

UK Regulatory Announcement

  *Proposed Transactions offer shareholders highly unique investment and
    asset proposition
  *Acquisition of AOP Orphan – a private, orphan disease company
    headquartered in Vienna, Austria
  *Acquires 48% of Newbridge Pharmaceuticals – a private Africa, Middle East
    & Turkey (AfMET) company, headquartered in Dubai, UAE
  *AOP & Newbridge together reach 20%+ of the world’s growing population and
    regions
  *Divestment of ELND005 into Speranza Therapeutics – a private and
    independent Irish company
  *Debt issuance of $800 million to optimize full potential of capital
    structure and markets
  *Share repurchase of $200 million: consistent and systematic return of
    capital to shareholders
  *Pro-forma cash balance at March 31, 2013 of ~ $1.2 billion
  *Shareholder vote: June 17, 2013 at the Extraordinary General Meeting (EGM)

DUBLIN

Elan Corporation, plc (NYSE: ELN) (Elan) today announces a series of
transactions designed to decisively transform and advance the company. Upon
shareholder approval, the totality of these strategically driven decisions, in
addition to the Theravance royalty participation agreement and dividend pass
through announced last week and the previously completed Tysabri transaction,
will form a dynamic and unique business foundation for Elan in the years
ahead.

CEO Commentary

Kelly Martin, Chief Executive Officer of Elan commented, “Our proposed package
of transactions is designed to create a balance of risk (science, molecules,
regulatory and reimbursement) with the benefit of diversification
(therapeutics, geographies, science and operational constructs) to produce
long-term growth in income and value.”

Mr Martin added, “Our goal is to create a company that achieves distinct and
sustainable success in the health care space. We are not constrained by legacy
infrastructure nor associated costs. We will operate flexible business
constructs that allow for participation in various parts of the industry value
chain for the direct benefit of our shareholders. The resulting ability for
effective long-term planning enables us to generate significant after tax
margin through advantageous tax structures. Lastly, the acceleration and
advancements in science, clinical knowledge and diagnostics across multiple
geographies should continue to generate a multitude of additional
opportunities for Elan to consider in the months and years ahead.”

Proposed Transactions

AOP Orphan Pharmaceuticals (AOP) www.aoporphan.com

  *Private company, headquartered in Vienna, Austria, focused on rare and
    orphan diseases
  *Business: clinical translation and medical marketing of innovative drugs
    in orphan indications
  *Therapeutic areas: Hematology & Oncology, Cardiology & Pulmonology,
    Neurology, and Metabolic Disorders
  *Four late stage pipeline programs (2014-2018 time frame) in:
    Hematology/Oncology and Cardiology/Pulmonology indications
  *Founded in 1996 by Dr. Rudolf Widmann (formerly GSK/Wellcome)
  *Approximately 145 employees
  *2012 Revenue:€59 million (~ $76 million ); 2012 Adjusted EBITDA:€15.5
    million (~ $20 million)^1

Elan will acquire 100% of AOP and upon close Elan will pay €263.5million for
the company, comprised of €175.7 million in cash and €87.8 million of Elan
ordinary shares. In addition, there will be potential cash milestone payments
of up to €270 million on the advancement (filing and acceptance) of certain
late stage clinical programs.

Newbridge Pharmaceuticals (Newbridge) www.nbpharma.com

  *Private start-up specialty pharmaceutical company, headquartered in Dubai,
    UAE and focused on the Africa Middle East and Turkey (AfMET) regions
  *Business: specializing in in-licensing, acquiring, registering and
    commercializing approved pharmaceuticals and biologics products
  *Therapeutic areas include oncology, immunology, metabolic disorders,
    gastrointestinal and CNS
  *Other shareholders include Kuwait Life Sciences Company and Burrill &
    Company
  *Approximately 40 employees
  *Joe Henein – President and Chief Executive Officer (formerly Wyeth
    Pharmaceuticals)

Elan has completed the first step in its investment in Newbridge by paying $40
million in exchange for 48% of the total fully diluted capitalization of the
company. In addition, Elan has appointed two Directors to the Board of
Newbridge. Elan has the option to purchase the remaining stake in Newbridge by
2015 for a sum of $244 million.

COO Commentary

Hans Peter Hasler, Elan’s Chief Operating Officer, added “AOP Orphan and
Newbridge Pharmaceuticals together create a highly unique business platform.
The geographic markets in which they operate are characterized by underlying
growth and demand for health care products, broad economic development and
increased patient and caregiver knowledge in disease areas such as oncology,
cardiovascular-pulmonology, hematology, gastroenterology, neurology and a
variety of rare and orphan diseases. We look forward to working together with
Dr. Widmann and Joe Henein and their teams to grow, advance and leverage their
respective business platforms.”

Speranza Therapeutics (ELND005)

  *Divest ELND005 to an independent company, Speranza Therapeutics, focused
    on progressing the development of ELND005 (Scyllo-inositol)
  *Current indications and activity for ELND005: Bi-Polar,
    Agitation/Aggression in Alzheimer’s disease, and Down Syndrome
  *Business objective: file in lead indication – Agitation/Aggression in
    Alzheimer’s disease
  *Third party equity financial partner will continue with clinical plans
    with current management
  *Current clinical trials and operations will continue – maintaining
    momentum

Elan will commit $70 million to the new entity upfront (plus up to a potential
future $8 million) for an 18% minority equity position, royalties in major
markets along with additional milestones, and retention of commercial rights
in certain territories and markets. The third party equity financial partner
will commit $20 million for 62% equity position (plus up to a potential future
$2 million). The remaining 20% equity will be allocated among Speranza
management. This allows Elan to eliminate the operating activities associated
with the development of the drug (2013 estimated spend:~ $80 million), while
at the same time maintaining a share of the potential upside.

Capital Structure, Balance Sheet and Shareholder Alignment

  *Debt offering of $800m: optimize capital structure, maintain strategic
    flexibility and significant cash balances
  *$200 million share repurchase program planned; details to be announced
  *Theravance Royalty Participation Interest: 20% pass through cash dividend
    added to existing Tysabri 20% dividend

CFO Commentary

Chief Financial Officer Nigel Clerkin added, “Upon approval and closing of
this set of transactions, the Elan business would be comprised of very high
net margin, multi asset and long term revenue streams (within Multiple
Sclerosis and Respiratory), an orphan disease platform, and a strong regional
commercial presence. All of these are underpinned by a strong balance sheet as
well as a highly efficient and strategically advantageous tax structure.”

Shareholder Approval

In accordance with the Irish Takeover Rules, Elan will convene an
Extraordinary General Meeting (EGM) to be held on Monday, June 17, 2013, to
obtain the requisite shareholder approval. Notice of the EGM, containing all
relevant information, will shortly be sent to shareholders.

Advisors

Elan’s financial advisors include Davy Corporate Finance, Morgan Stanley,
Ondra Partners, Citi, Evercore Partners and Ponthieu Partners. Elan’s legal
advisors are Cadwalader, Wickersham & Taft, A&L Goodbody, Schoenherr and Allen
& Overy.

Investor/Analyst Conference Call

Elan will host an investor/analyst conference call at 8.30am ET today. This
call will be simultaneously webcast over the internet and will be available to
investors, members of the news media and the general public. The event can be
accessed by visiting Elan’s website at www.elan.com and clicking on the
Investor Relations section, then on the event icon. Slides will be available
on www.elan.com at the time of the conference call/webcast.

About Elan

Elan is a biotechnology company, headquartered in Ireland, committed to making
a difference in the lives of patients and their families by dedicating itself
to bringing innovations in science to fill significant unmet medical needs
that continue to exist around the world. For additional information about
Elan, please visit http://www.elan.com.

As required by the Irish Takeover Rules, the Directors of Elan accept
responsibility for the information contained in this announcement. To the best
of their knowledge and belief (having taken all reasonable care to ensure such
is the case); the information contained in this announcement is in accordance
with the facts and does not omit anything likely to affect the import of such
information.

Any holder of 1% or more of any class of relevant securities of Elan may have
disclosure obligations under Rule 8.3 of the Irish Takeover Panel Act, 1997,
Takeover Rules 2007 (as amended).

Forward Looking Statements

This press release contains forward-looking statements that involve
substantial risks and uncertainties. You can identify these statements by the
fact that they use words such as “anticipate”, “estimate”, “project”,
“target”, “intend”, “plan”, “will”, “believe”, “expect” and other words and
terms of similar meaning in connection with any discussion of future financial
performance or events. Among the factors that could cause actual results to
differ materially from those described or projected herein are the following:
risks related to delays or difficulties encountered in obtaining, or the
failure to obtain, the approval of Elan’s shareholders for the Theravance, AOP
and ELND005 transactions, the possibility that intervening events could arise
which could alter the timing, or the ability to consummate the Theravance, AOP
or the ELND005 transactions even if Elan shareholder approval is obtained, the
risk that third parties could challenge any or all of the transactions, even
if the transactions are approved by Elan shareholders and consummated, risks
that the transactions do not provide the benefits to Elan that are
anticipated, whether Elan can successfully access the capital markets to raise
debt financing and, as Elan’s principal source of revenue may remain a royalty
on sales of Tysabri, the potential of Tysabri, which may be severely
constrained by increases in the incidence of serious adverse events (including
death) associated with Tysabri (in particular, by increases in the incidence
rate for cases of PML), or by competition from existing or new therapies (in
particular, oral therapies), and the potential for the successful development
and commercialization of products, whether internally or by acquisition,
especially given the separation of the Prothena business which left Elan with
no material pre-clinical research programs or capabilities; Elan’s ability to
maintain sufficient cash, liquid resources, and investments and other assets
capable of being monetized to meet its liquidity requirements; the success of
our development activities, and research and development activities in which
Elan retains an interest, including, in particular, the impact of the
announced discontinuation of the development of bapineuzumab intravenous in
mild to moderate Alzheimer’s disease; failure to comply with anti-kickback,
bribery and false claims laws in the United States, Europe and elsewhere;
difficulties or delays in manufacturing and supply of Tysabri; trade buying
patterns; the impact of potential biosimilar competition, the trend towards
managed care and health care cost containment, including Medicare and
Medicaid; legislation and other developments affecting pharmaceutical pricing
and reimbursement (including, in particular, the dispute in Italy with respect
to Tysabri sales), both domestically and internationally; failure to comply
with Elan’s payment obligations under Medicaid and other governmental
programs; exposure to product liability (including, in particular, with
respect to Tysabri) and other types of lawsuits and legal defense costs and
the risks of adverse decisions or settlements related to product liability,
patent protection, securities class actions, governmental investigations and
other legal proceedings; Elan’s ability to protect its patents and other
intellectual property; claims and concerns that may arise regarding the safety
or efficacy of Elan’s product candidates; interest rate and foreign currency
exchange rate fluctuations and the risk of a partial or total collapse of the
euro; governmental laws and regulations affecting domestic and foreign
operations, including tax obligations; whether Elan is deemed to be an
Investment Company or a Passive Foreign Investment Company; general changes in
United States and International generally accepted accounting principles;
growth in costs and expenses; and the impact of acquisitions, divestitures,
restructurings, product withdrawals and other unusual items. A further list
and description of these risks, uncertainties and other matters can be found
in Elan’s Annual Report on Form 20-F for the fiscal year ended December 31,
2012, and in its Reports of Foreign Issuer on Form 6-K filed with the SEC.
Elan assumes no obligation to update any forward-looking statements, whether
as a result of new information, future events or otherwise.

^1 Unaudited

Investor Relations:
Chris Burns, + 1-800-252-3526
or
David Marshall, +353-1-709-4444
Media Relations
Emer Reynolds, +353-1-709-4022
or
FTI Consulting
Jonathan Birt, +44-751-559-7858
or
Sard Verbinnen & Co
Jamie Tully, +1-212-687-8080

Contact:

Elan Corporation PLC
 
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