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In Royalty Pharma's View, Elan's EGM Circular is Misleading and Omits Key Information that Elan Shareholders Need to Make an

  In Royalty Pharma's View, Elan's EGM Circular is Misleading and Omits Key
     Information that Elan Shareholders Need to Make an Informed Decision

IF ELAN STOCKHOLDERS APPROVE ANY OF THE FOUR PROPOSED TRANSACTIONS, ROYALTY
PHARMA WILL BE REQUIRED TO LAPSE ITS OFFER(I),(II)

ROYALTY PHARMA RECOMMENDS ELAN SHAREHOLDERS VOTE "AGAINST" EACH OF THE ELAN
RESOLUTIONS AT THE ELAN EXTRAORDINARY GENERAL MEETING

PR Newswire

NEW YORK, June 11, 2013

NEW YORK, June 11, 2013 /PRNewswire/ --Royalty Pharma today announced that it
believes Elan's (NYSE: ELN) disclosure in its May 27 ^ EGM Circular is
misleading and inadequate, in Royalty Pharma's view, because it fails to:

Regarding the entire package of proposed transactions:

  odisclose that the Theravance, AOP, Speranza and inconsequential Newbridge
    and share repurchase transactions do not come close to replacing the
    earnings that Elan gave up by selling half of its Tysabri interest^^[1].
    The Theravance, AOP and Newbridge acquisitions, for example, will only
    produce ~$0.14 of 2015E cash EPS and ~$0.21 of 2016E cash EPS, based on
    the analysis set out below^^[2]; pro forma for the proposed acquisitions
    Elan will have ~$0.53 of 2015E cash EPS and ~$0.71 of 2016E cash EPS;
  odisclose that if Elan stock were to trade at comparable 2015E and 2016E
    Price/Earnings multiples to Jazz, Valeant and a specialty pharma peer
    group, Elan's stock would trade at ~$4.19 to ~$6.44^^[3];

Regarding the Theravance Transaction:

  oprovide any valuation parameters despite analysts suggesting that (if
    approved) Elan would overpay by ~$300-500 million^^[4], thus transferring
    ~$300-500 million of value from Elan shareholders to Theravance
    shareholders;
  odisclose that Elan management did not see the unredacted GSK License
    (which Royalty Pharma believes to be the case, based on statements made by
    Theravance^^[5]) – and that contractual risks not known to Elan could
    materially reduce, even further, the value of royalties in the proposed
    Theravance deal;
  oadequately disclose that Theravance's own 'crown jewel' products, in which
    Elan did not receive a financial interest, could cannibalize the royalties
    due to Elan^^[6];
  odisclose that Elan shareholders could have invested in Theravance shares
    directly and thus, in Royalty Pharma's view (a) avoided paying a
    significant premium, (b) taken on less risk, and (c) achieved exposure to
    Theravance's 'crown jewel' products;
  ostate that by agreeing to "no fiduciary out" "Elan could be exposed to a
    claim for damages for breach of contract and such damages would not be
    subject to limitation or "cap" under any provision of the Theravance
    Agreement" as was later disclosed in a filing with the US Securities &
    Exchange Commission;

Regarding the AOP Orphan ("AOP") Transaction:

  odisclose that a significant portion of AOP's business is a low-margin
    distribution model, not an orphan drug business^^[7] – therefore, in
    Royalty Pharma's view, the acquisition price is far too high;
  oclearly disclose that 75% of up to $290 million in AOP milestones become
    due if Elan decides to abandon AOP products for commercial reasons (other
    than clinical failure) on or before December 31, 2017, thereby committing
    Elan to spend money on products that may have little hope of commercial
    success, in Royalty Pharma's view; 
  odisclose the 17.0x 2012 EBITDA acquisition multiple (excluding the
    milestones) or the 27.9x 2012 EBITDA acquisition multiple (pro forma for
    payment of 75% of certain milestones as referenced above) or compare it
    with the much lower 13.5x median comparable multiple for similar
    acquisitions^^[8];
  oreveal that AOP's lead pipeline products will require tens if not hundreds
    of millions to develop, in Royalty Pharma's view, effectively replacing
    ELND005 spending with potentially higher R&D expenses for AOP's products.
    AOP is focused predominantly on Eastern European markets, making these
    programs inherently lower return in Royalty Pharma's view;

Regarding the Speranza Transaction:

  oprovide any information on what it would cost to simply cease development
    of ELND005;
  odisclose that the head of Speranza is a former Elan executive;
  odisclose that Elan's contribution to Speranza of ELND005 and up to $77.8
    million in cash disguises an expensive write-off of a failed drug
    candidate; and

Regarding the $200 Million Inconsequential Share Repurchase:

  odisclose the timing, method or share price of the repurchase or the impact
    on Elan's financials – Royalty Pharma believes that the share buyback is
    yet another attempt by Elan to fend off Royalty Pharma's Offer. A $200mm
    repurchase has an inconsequential c. 3% impact on the number of shares
    outstanding^^[9].

Royalty Pharma urges shareholders of Elan to vote "AGAINST" EACH of the four
resolutions proposed by Elan at its upcoming extraordinary general meeting on
June 17, 2013.

ISS and Glass Lewis – the two leading independent proxy advisory firms – also
recommend that the shareholders of Elan vote "AGAINST" EACH of the four
resolutions proposed by Elan^^[10].

To meet the official voting deadlines:

  oHolders of Elan American Depository Receipts held in street name may only
    vote their proxies through BroadRidge up to 11:59 PM New York time on
    Wednesday, June 12.
  oHolders of Elan Ordinary Shares may only vote their proxies through
    Computershare (Ireland) up to 10:00 a.m. Irish time on Saturday, June 15.

^(i) Royalty Pharma had requested permission from the Irish Takeover Panel to
the effect that it would not be obliged to lapse (withdraw) the Offer in the
event that the ELND005 Transaction and / or the Share Repurchase Program were
approved at the Elan EGM. On 6 June 2013, the Irish Takeover Panel ruled that
Royalty Pharma will be required to lapse the Further Increased Offer in the
event that either the ELND005 Transaction and / or the Share Repurchase
Program are approved at the Elan EGM.

^(ii) Royalty Pharma is considering its response to the ruling of the Irish
Takeover Panel referred to in the note above.

DETAILS

Having reviewed the limited disclosure made by Elan to its shareholders in the
EGM Circular, Royalty Pharma today provides its observations on what Elan has
and – importantly – has not said regarding its recently proposed transactions.

Royalty Pharma believes important risks were omitted from Elan's disclosures
around the Theravance deal

Elan management and the Elan Board agreed to spend $1 billion to buy a royalty
without, in Royalty Pharma's view, access to the basic due diligence
information required to fully assess the value of what they were buying^^[11].

Royalty Pharma believes that Elan has not seen the unredacted license
agreement between Theravance and GlaxoSmithKline^^[12] (the "GSK License"), a
point which was not disclosed in the lengthy risk section of the EGM
Circular. Depending on the nature of the redacted terms in the GSK License,
the value of the royalties Elan acquired from Theravance could be materially
lower than what Elan had assumed at the time of the transaction.

Elan Stockholders should ask Elan management and the Elan Board if they know,
for example, what the royalty rates and sales tiers are for Anoro in the GSK
License agreement. It is known that the royalties on Anoro tier upward from
6.5% to 10%^^[13], but to our knowledge, neither Theravance nor Elan have made
public how many tiers there are, or what the tier thresholds are. To
illustrate the importance of this information, the value of the Anoro royalty
would be very different if, for example, the tiers are $2 billion, $3 billion,
and $4 billion rather than, for example, $200 million, $300 million, and $400
million.

Elan Stockholders should also ask Elan management what royalty reductions are
contemplated by the GSK License agreement in the event that generics enter
and/or achieve certain market share thresholds. Royalty Pharma has seen
licenses in which the royalties are reduced by 50% or more under these
circumstances, but this entire section is redacted in the version of the GSK
License that Royalty Pharma believes was relied upon by Elan when it agreed to
the Theravance Transaction. Royalty Pharma believes that the fact that Elan
agreed to a transaction without access to this information is irresponsible
and highlights Elan's lack of experience in conducting due diligence and
negotiating royalty purchases.

Investors would be better off investing in Theravance directly rather than
indirectly via Elan, in Royalty Pharma's view

Elan highlights in the EGM Circular that Elan Stockholders will receive 20% of
Elan's Theravance royalties through dividends^^[14]. Elan fails to mention,
however, that a direct investment in Theravance stock by Elan investors would,
in Royalty Pharma's view, have a number of advantages:

  othe embedded value of the royalties in Theravance shares is much lower
    than the price paid by Elan, a view held not only by Royalty Pharma, but
    multiple analysts^^[15];
  oroyalties held by Theravance are better "protected" from future burn (due
    to the spinout of a "RoyaltyCo"), whereas in Elan's case, management
    appears to intend to reinvest 80% of these royalty payments into what
    Royalty Pharma views as a poorly articulated and unfocused acquisition
    strategy; and
  oTheravance shares provide exposure to a much richer array of royalties,
    including in Theravance's 'crown jewel' products, commonly referred to as
    the "triples"^^[16]. In Royalty Pharma's view, Elan's subset of royalties
    is less interesting, as it relies on products that will likely not compete
    effectively against the 'crown jewel' products.

In Royalty Pharma's view, Elan has not provided a plausible rationale to
support its assertions on valuation of the Theravance or AOP transactions

Elan selectively cited a single analyst^^[17] that supports the Theravance
transaction (out of the sixteen analysts listed on Elan's website) in the EGM
Circular, the analyst with the highest price target on Elan. The Elan Circular
quoted only from this analyst's May 13 note regarding Theravance, whereasthe
titleof his May 21 note on the subsequent acquisitions was much more
skeptical: "Value Creation or Imagination". The quote from the May 13 report
used by Elan asserts that the Theravance deal is "virtually pure profit",
failing to mention that there is no real profit until after Elan receives back
its $1 billion investment, which does not occur until 2023^^[18] based on this
analyst's own forecast model.

Royalty Pharma believes this analyst's valuation methodology on Theravance is
aggressive: 76% of his valuation comes from a terminal value calculation post
2021, which includes cash flow that is less certain. More than 38% of the
sales in this analyst's forecast are derived from currently unapproved drugs,
so it is possible that should these drugs fail to receive marketing approval,
no profit will ever be made on those products, or Elan would achieve a
significantly lower IRR. The analyst also uses the same low 7.5% discount rate
for cash flows from unapproved product sales, and product sales after 2021
that he uses for approved product sales and product sales before 2021, which
makes little sense in Royalty Pharma's view. Royalty Pharma believes that a
more accurate valuation methodology for the Theravance royalties would be to
forecast sales and royalty payments through patent expiration in 2028^^[19],
and avoid a terminal value approach which is likely to include cash flows post
patent expiration when no payments may be due toTheravance or Elan.

In Royalty Pharma's view, AOP looks more like a low-tech distribution business
than a cutting-edge orphan drug company

Elan claims that AOP is a "pioneer" in the orphan and rare disease space, in
what Royalty Pharma sees as an obvious attempt to link AOP to the positive
investor sentiment that surrounds orphan drug companies. The reality, in the
view of Royalty Pharma, is that AOP is not a true orphan drug company with
innovative science or significant internal research and development
capabilities.

  oA significant portion of AOP's business comes from a relatively low margin
    distribution business in Central and Eastern Europe^^[20]. AOP's two
    largest products, which accounted for 93% of sales in 2012, both lose
    exclusivity in 2014^^[21]. Furthermore, the majority of AOP's products
    have had generic versions launched in the Western world^^[22]. Elan
    rightly discloses that "as various sources of exclusivity expire in
    relation to relevant AOP products (including Thromboreductin in 2014),
    revenues for the relevant products may fall significantly".
  oWith business activity in eight disease areas^^[23] (hematology, oncology,
    cardiovascular, pulmonary, anesthesia, intensive care medicine, neurology
    and infectious disease), Royalty Pharma believes that AOP lacks the
    therapeutic focus needed for a company of its limited scale.
  oHaving reviewed its compounds in development, Royalty Pharma's view is
    that AOP's pipeline includes nothing particularly innovative. Yet, given
    the significant costs that will likely be required to further develop its
    pipeline, Royalty Pharma believes R&D spend is likely to be a drag on
    earnings for the foreseeable future.

Elan's characterization of AOP's "late-stage" pipeline is generous

In a May 27 2013 interview with Elan's CEO, BioCentury referred to AOP as
having three Phase III products^^[24]. However, AOP's own website suggests to
Royalty Pharma that this is an exaggeration. The website shows Peg-interferon
to be in a 24-patient "Phase I/II Dose Escalation Study" with an expected
completion date of August 2013. Additional claimed "Phase III" programs
include a beta blocker called AOP200704, which is shown to have completed a
16-patient trial, and reformulated anagrelide, which appears to be a follow-on
to Thromboreductin, which loses exclusivity next year^^[25]. If
peg-interferon and AOP200704 are being pushed into Phase III, Royalty Pharma
believes Elan shareholders should be concerned since the already thin margins
of AOP are likely to come under further pressure in order to fund these costly
late-stage development programs.

Shareholders should recall Elan's recent Phase III track record. Elan
initially tried to push ELND005 – a compound that had failed both of its
primary endpoints – into Phase III. On August 9, 2010, Elan issued a press
release saying that ELND005 had failed both of its primary endpoints in a
351-patient trial, followed by the statement that "However, following
discussion with experts, Phase III development is planned". Elan then embarked
on a two-year period of presenting various post-hoc analyses of the data at
various medical meetings. Elan also "doubled down" on ELND005 in December
2010, buying out its partner for up to $113 million in upfront and milestone
payments. Royalty Pharma notes that cooler heads ultimately prevailed and
Phase III never started. However, by the time the spin-off of Speranza is
funded, well over $200 million will have been spent by Elan on ELND005^^[26],
which, in Royalty Pharma's view, is proposed to be essentially written-off
through a contribution to Speranza.

The AOP milestone payments could be triggered if programs are abandoned for
commercial reasons

Not disclosed in the EGM Circular, but disclosed in the Elan/AOP agreement, is
the fact that Elan has agreed to pay 75% of certainmilestone payments (or up
to ~$218 million) in the event that a program is abandoned for any reason
before 31 December 2017 (apart from "clinical failure", which is defined as a
"clinical event or clinical evidence which does not support progression or
continued development of a program on grounds of safety or efficacy" but can
in Royalty Pharma's view sometimes be subjective). The inclusion of this
provision limits Elan's freedom to stop spending money on programs that are
not promising (from a commercial and perhaps a clinical perspective) as there
would be a significant cost to do so^^[27].

Speranza: Burden of Elan's spin out of ELND005 falls almost entirely on Elan
shareholders

Royalty Pharma believes Elan has completely changed its stance on ELND005,
which just a few months ago was described by the Elan CEO as a "very
interesting molecule" with a potential "big reward"^^[28]. In the view of
Royalty Pharma, Elan is now attempting to disguise an expensive write-off of
this product by spinning it out into a new company, Speranza. Elan has
committed to provide up to $77.8 million in capital ($7 million of which will
be in the form of a 10 year interest free loan, and up to approximately $7.8
million of which can be called to fund the business plan) and only receive a
3% royalty and 18% of the equity^^[29]. Meanwhile, its co-investor, Nerano,
which is controlled by a former Elan senior executive, Mr. Mulligan, will
invest only $20 million in the form of a ten year interest free loan plus an
additional up to approximately $2.3 million to fund the business plan, and
receive 62% of the equity. The loan from Mr. Mulligan, together with the $7
million interest free loan from Elan, has priority in repayment if Speranza is
wound up within 15 months as a result of a pipeline failure (specifically a
"termination event"). Soessentially Mr. Mulligan can shut the company down in
the first fifteen months if a "termination event" occurs and get his money
back as long as $27 million remains unspent, thus having limited (or
potentially no) downside if the product fails, but significant upside should
it succeed. Speranza management (other than Mr. Mulligan) will put up no
money and will receive more equity than Elan. Notably, Elan does not
adequately disclose, in Royalty Pharma's opinion, that it appears to be fully
funding the clinical risk of Speranza yet giving away the vast majority of the
upside. In Royalty Pharma's view, the economics of this deal are astoundingly
poor for Elan.

The strategy underpinning Elan's transactions seems incoherent

In its EGM Circular, Elan states that: "...the transactions are 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 that
allows for participation in various parts of the industry value chain".

Royalty Pharma believes that Elan appears to miss the point entirely that
shareholders typically own tens if not hundreds of positions and can easily
diversify their risks without Elan paying high prices to do it for them. On
the contrary, it is widely accepted that stock market investors often discount
"conglomerates", in part because they cannot get enough exposure to elements
they find attractive without also being exposed to the rest.

In terms of becoming an "income" stock, the magnitude of dividend yield here
is approximately 1-2%^^[30], whereas in Royalty Pharma's opinion income
investors typically need above 3-4% yield for "income" stocks. Royalty Pharma
therefore believes it is a real stretch for Elan to say "Tysabri should
continue as a strong income generator for shareholders through the dividend
directly linked to Tysabri's performance"^^[31].

In Royalty Pharma's view, Elan appears to be trading ELND005 and Prothena for
an equally unattractive AOP pipeline of likely high cost R&D programs which
are not competitively positioned and are limited to small markets, making it
difficult for Elan to achieve a positive return on its investment.

Elan management now appears to believe that it is in its shareholders' best
interests for it to make minority investments in companies like Newbridge,
which is a passive investment that has no earnings, nor would any earnings be
consolidated into Elan. Is Elan management now a stock investor? Do Elan
Stockholders really need Elan to provide them with exposure to equity
investments?

Future Value Destruction of Elan's Proposed Transactions^^[32]

Prior to the Tysabri Transaction with Biogen, analysts forecasted Elan 2015E
EPS of $0.85 and 2016E EPS of $1.02^^[33]. Post the transaction, Elan EPS
forecasts were reduced to $0.33 in 2015E and $0.42 in 2016E^^[34]. When Elan
sold approximately 50% of the Tysabri economics to Biogen^^[35], it sold
approximately 60% of its earnings^^[36].

Implied Elan EPS^^[37]
                              2015E EPS 2016E EPS
Consensus (Tysabri Royalty)   $0.33     $0.42
Share repurchases             $0.06     $0.08
Theravance / AOP contribution $0.14     $0.21
Total                         $0.53     $0.71

Note: This is not a profit forecast

Royalty Pharma believes that:

  oElan's transactions do not come close to replacing the quantity or quality
    of earnings that Elan gave up by selling approximately half of its Tysabri
    interest^^[38];
  oElan's over $1.3 billion in acquisitions will only produce approximately
    $0.14 of 2015E cash EPS and $0.21 of 2016E cash EPS, based on the analysis
    set out above;
  othe Theravance royalties are a wasting asset (an asset with a finite life
    that pays out over time), so the amortization of the purchase price
    amounts to approximately $0.12, assuming amortization over 17 years. On
    this basis, the real contribution to EPS from acquisitions is negligible;
    and
  oif Elan reduces R&D expenses by $80 million per year (Royalty Pharma
    believes this to be unlikely, given AOP R&D expense), that would result in
    a further increase in EPS of just $0.16 per year^^[39].

The chart below calculates the implied Elan stock price based on the pro forma
Elan EPS post the proposed transactions shown above and based on 2015E and
2016E P/E of selected peers.

Implied Elan Stock Price based on 2015E EPS^^[40]
Peer set         Peer P/E multiple on: Elan EPS Implied Elan Stock Price
Specialty Pharma 11.0x                 $0.53    $5.84
Valeant          8.5x                  $0.53    $4.51
Jazz             7.9x                  $0.53    $4.19



Implied Elan Stock Price based on 2016E EPS
Peer set         Peer P/E multiple on: Elan EPS Implied Elan Stock Price
Specialty Pharma 9.1x                  $0.71    $6.44
Valeant          7.5x                  $0.71    $5.30
Jazz             7.0x                  $0.71    $4.95

Royalty Pharma believes that:

  oif Elan shareholders approve what Royalty Pharma views as Elan
    management's ill-conceived acquisitions, the implied trading range for
    Elan is well below Royalty Pharma's offer price of $13.00 up to $15.50 per
    share (including the maximum aggregate amount payable under the CVRs);
  oit is hard to justify Elan / AOP Pharma trading at a premium to companies
    with proven track records given what we know today; and
  oif Elan reduces R&D expenses by $80 million per year the savings would
    have an impact on the implied Elan Stock Price of up to $1.72^^[41] (at
    the above multiples), resulting in an implied Elan stock price of $5.91 to
    $8.16^^[42].

Conclusion

ELAN STOCKHOLDERS SHOULD BE MINDFUL THAT THE SHAREHOLDER VOTES ON THESE
TRANSACTIONS ARE ONLY BEING HELD DUE TO ELAN BEING IN AN OFFER PERIOD. IF NOT
FOR THIS FACT, THESE TRANSACTIONS WOULD LIKELY HAVE ALREADY CLOSED BY NOW.

IF ELAN STOCKHOLDERS APPROVE ANY OF THE TRANSACTIONS AT THE ELAN EGM:

  oROYALTY PHARMA'S OFFER WILL LAPSE ^(i),(ii)
  oIN ROYALTY PHARMA'S VIEW, STOCKHOLDERS CAN EXPECT MORE OF THE SAME FROM
    ELAN: LOW-QUALITY, HASTILY ARRANGED, OVERPRICED TRANSACTIONS WITH LIMITED
    DUE DILIGENCE AND DISCLOSURE – AND POTENTIALLY NO ABILITY TO STOP THEM
    WITH A SHAREHOLDER VOTE

Royalty Pharma urges shareholders of Elan to VOTE "AGAINST" ALL FOUR
RESOLUTIONS proposed by Elan at its upcoming extraordinary general meeting on
June 17, 2013.

ISS and Glass Lewis – the two leading independent proxy advisory services –
also recommended that the shareholders of Elan VOTE "AGAINST" ALL FOUR
RESOLUTIONS proposed by Elan^^[43] ^

^(i) Royalty Pharma had requested permission from the Irish Takeover Panel to
the effect that it would not be obliged to lapse (withdraw) the Offer in the
event that the ELND005 Transaction and / or the Share Repurchase Program were
approved at the Elan EGM. On 6 June 2013, the Irish Takeover Panel ruled that
Royalty Pharma will be required to lapse the Further Increased Offer in the
event that either the ELND005 Transaction and / or the Share Repurchase
Program are approved at the Elan EGM.

^(ii) Royalty Pharma is considering its response to the ruling of the Irish
Takeover Panel referred to in the note above.

J.P. Morgan, together with its affiliate J.P. Morgan Cazenove, BofA Merrill
Lynch, together with its affiliate Merrill Lynch International, Groton
Partners and Investec are acting as financial advisers to Royalty Pharma.

Further information relating to the Further Increased Offer, including all
announcements issued by or on behalf of Royalty Pharma, is available at
www.royaltypharma.com.

Capitalized terms used but not defined in this announcement have the meaning
given to them in Royalty Pharma's Further Revised Offer Document.

FURTHER INFORMATION

The distribution of this announcement in, into, or from, certain jurisdictions
other than Ireland, the United Kingdom and the United States may be restricted
or affected by the laws of those jurisdictions. Accordingly, copies of this
announcement are not being, and must not be, mailed or otherwise forwarded,
distributed or sent in, into, or from any such jurisdiction. Therefore persons
who receive this announcement (including without limitation nominees, trustees
and custodians) and are subject to the laws of any jurisdiction other than
Ireland, the United Kingdom and the United States who are not resident in
Ireland, the United Kingdom or the United States will need to inform
themselves about, and observe any applicable restrictions or requirements. Any
failure to do so may constitute a violation of the securities laws of any such
jurisdiction.

Additional Notice to US Investors

This announcement is not a substitute for the Further Revised Offer Document
and the Further Revised Acceptance Documents that Royalty Pharma filed with
the Securities and Exchange Commission ("SEC") on Amendment No. 12 to Schedule
TO on June 10, 2013, or any other document that Royalty Pharma has filed and
may file with the SEC in connection with the Offer. ELAN STOCKHOLDERS ARE
URGED TO READ ANY SUCH DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR
ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE OFFER. Any such
documents will be available free of charge through the website maintained by
the SEC at www.sec.gov or by directing a request to any of the persons listed
above.

The Offer is and will be made in the United States pursuant to the US Exchange
Act subject to certain exemptive relief which has been granted in respect of
the Offer by the SEC and otherwise in accordance with the requirements of the
Irish Takeover Rules. Accordingly, the Offer will be subject to disclosure
and other procedural requirements, including with respect to withdrawal
rights, offer timetable, settlement procedures and timing of payments that may
be different from those typically applicable under U.S. domestic tender offer
procedures and law. In addition, the Original Offer Document, the Revised
Offer Document, the Further Revised Offer Document and any other documents
relating to the Offer have been or will be prepared in accordance with the
Irish Takeover Rules and Irish disclosure requirements, format and style, all
of which may differ from those in the United States.

Elan is incorporated under the laws of Ireland. Some of the directors of Elan
are resident in countries other than the United States. As a result, it may
not be possible for United States holders of Elan Stock to effect service of
process within the United States upon Elan or such directors of Elan or to
enforce against any of them judgements of the United States predicated upon
the civil liability provisions of the federal securities laws of the United
States. It may not be possible to sue Elan or its officers or directors in a
non-US court for violations of US securities laws. In addition, US holders of
Elan Stock should be aware that, if Royalty Pharma elects to proceed pursuant
to a scheme of arrangement (as described in the Original Offer Document, the
Revised Offer Document and the Further Revised Offer Document), the federal
securities laws of the United States may not be applicable.

Additional Information

Any response in relation to the Further Increased Offer (including any
acceptance thereof) should be made only on the basis of the information
contained in the Further Revised Offer Document, the Further Revised
Acceptance Documents or any other document by which the Further Increased
Offer is made.

Royalty Pharma reserves the right, with the consent of the Irish Takeover
Panel, to elect to implement the acquisition of Elan by way of court-approved
scheme of arrangement under Section 201 of the Companies Act 1963 of Ireland.

Responsibility Statements

The directors of Royalty Pharma accept responsibility for the information
contained in this announcement, save that the only responsibility accepted by
the directors of Royalty Pharma in respect of the information in this
announcement relating to Elan, the Elan Group, the Board of Elan and the
persons connected with them, which has been compiled from published sources,
has been to ensure that such information has been correctly and fairly
reproduced or presented (and no steps have been taken by the directors of
Royalty Pharma to verify this information). To the best of the knowledge and
belief of the directors of Royalty Pharma (having taken all reasonable care to
ensure that such is the case), the information contained in this announcement
for which they accept responsibility is in accordance with the facts and does
not omit anything likely to affect the import of such information.

The managing member of RP Management accepts responsibility for the
information contained in this announcement, save that the only responsibility
accepted by the managing member of RP Management in respect of the information
in this announcement relating to Elan, the Elan Group, the Board of Elan and
the persons connected with them, which has been compiled from published
sources, has been to ensure that such information has been correctly and
fairly reproduced or presented (and no steps have been taken by the managing
member of RP Management to verify this information). To the best of the
knowledge and belief of the managing member of RP Management (having taken all
reasonable care to ensure that such is the case), the information contained in
this announcement for which he accepts responsibility is in accordance with
the facts and does not omit anything likely to affect the import of such
information.

Other

J.P. Morgan, together with its affiliate J.P. Morgan Cazenove (which is
authorised and regulated by the Financial Conduct Authority in the United
Kingdom), is acting exclusively for Royalty Pharma and RP Management in
connection with the matters described in this announcement and for no one
else, and is not, and will not be, responsible to anyone other than Royalty
Pharma and RP Management for providing the protections afforded to clients of
J.P. Morgan or its affiliates, or for providing advice in relation to the
Further Increased Offer or any other matters referred to in this announcement.

BofA Merrill Lynch, together with its affiliate Merrill Lynch International
(which is authorised and regulated by the Financial Conduct Authority in the
United Kingdom), is acting exclusively for Royalty Pharma and RP Management in
connection with the matters described in this announcement and for no one
else, and is not, and will not be, responsible to anyone other than Royalty
Pharma and RP Management for providing the protections afforded to clients of
BofA Merrill Lynch or its affiliates or for providing advice in relation to
the Further Increased Offer or any other matters referred to in this
announcement.

Groton Partners is acting exclusively for Royalty Pharma and RP Management in
connection with the matters described in this announcement and for no one
else, and is not, and will not be, responsible to anyone other than Royalty
Pharma and RP Management for providing the protections afforded to its clients
or for providing advice in relation to the Further Increased Offer or any
other matters referred to in this announcement.

Investec Corporate Finance Ireland Limited trading as Investec is regulated by
the Central Bank of Ireland and is acting exclusively for Royalty Pharma and
RP Management in connection with the matters described in this announcement
and for no one else, and is not, and will not be responsible to anyone other
than Royalty Pharma and RP Management for providing the protections afforded
to clients of Investec Corporate Finance Ireland Limited or for providing
advice in relation to the Further Increased Offer or any other matters
referred to in this announcement.

Forward-looking Statements

This announcement may include certain "forward looking statements" with
respect to the business, strategy and plans of Royalty Pharma and its
expectations relating to the Further Increased Offer and Elan's future
financial condition and performance. Statements that are not historical facts,
including statements about Elan or Royalty Pharma or Royalty Pharma's belief
and expectation, are forward looking statements. Words such as "believes",
"anticipates", "estimates", "expects", "intends", "aims", "potential", "will",
"would", "could", "considered", "likely", and variations of these words and
similar future or conditional expressions are intended to identify forward
looking statements but are not the exclusive means of identifying such
statements. By their nature, forward looking statements involve risk and
uncertainty because they relate to events and depend upon future circumstances
that may or may not occur.

Examples of such forward looking statements include (but are not limited to)
statements about expected benefits and risks associated with the Further
Increased Offer; projections or expectations of profit attributable to
shareholders; anticipated provisions or write-downs, economic profit,
dividends, capital structure or any other financial items or ratios;
statements of plans, objectives or goals of Elan, the Elan Group, RP
Management or Royalty Pharma following the Further Increased Offer; statements
about the future trends in interest rates, liquidity, foreign exchange rates,
stock market levels and demographic trends and any impact that those matters
may have on Elan, the Elan Group, RP Management or Royalty Pharma following
the Further Increased Offer; statements concerning any future Irish, US or
other economic environment or performance; statements about strategic goals,
competition, regulation, regulatory approvals, dispositions and consolidation
or technological or regulatory developments; and statements of assumptions
underlying such statements.

Forward looking statements only speak as of the date on which they are made,
and the events discussed in this announcement may not occur. Subject to
compliance with applicable law and regulation, Royalty Pharma is not under any
obligation to update publicly or revise forward looking statements, whether as
a result of new information, future events or otherwise.

Rule 8 - Dealing Disclosure Requirements

Under the provisions of Rule 8.3 of the Irish Takeover Rules, if any person
is, or becomes, "interested" (directly or indirectly) in 1% or more of any
class of "relevant securities" of Elan, all "dealings" in any "relevant
securities" of Elan (including by means of an option in respect of, or a
derivative referenced to, any such "relevant securities") must be publicly
disclosed by not later than 3.30 pm (Irish time) on the "business day"
following the date of the relevant transaction. This requirement will continue
until the date on which the Further Increased Offer becomes or is declared
unconditional as to acceptances or lapses or is otherwise withdrawn or on
which the Offer Period otherwise ends. If two or more persons co-operate on
the basis of any agreement, either express or tacit, either oral or written,
to acquire an "interest" in "relevant securities" of Elan, they will be deemed
to be a single person for the purpose of Rule 8.3 of the Irish Takeover Rules.

Under the provisions of Rule 8.1 of the Irish Takeover Rules, all "dealings"
in "relevant securities" of Elan by Elan or Royalty Pharma, or by any of their
respective "associates" must also be disclosed by no later than 12 noon (Irish
time) on the "business day" following the date of the relevant transaction.

A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed can be found on the Irish Takeover
Panel's website at www.irishtakeoverpanel.ie.

"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option
in respect of, or derivative referenced to, securities.

Terms in quotation marks are defined in the Irish Takeover Rules, which can be
found on the Irish Takeover Panel's website.

If you are in any doubt as to whether or not you are required to disclose a
"dealing" under Rule 8, please consult the Irish Takeover Panel's website at
www.irishtakeoverpanel.ie or contact the Irish Takeover Panel on telephone
number +353 (0)1 678 9020; fax number +353 (0)1 678 9289.

No Profit Forecast / Asset Valuations

No statement in this announcement constitutes a profit forecast for any
period, nor should any statement be interpreted to mean that earnings or
earnings per share will necessarily be greater or lesser than those for the
relevant preceding financial periods for Royalty Pharma, RP Management or Elan
as appropriate. No statement in this announcement constitutes an asset
valuation.

Sources and Bases

Save where otherwise stated, financial and other information concerning Elan,
the Elan EGM and Royalty Pharma has been extracted from published sources,
including the Revised Offer Document and the Elan EGM Circular.

Share price data sourced from Factset.

^^[1] Royalty Pharma opinion that announced transactions do not come close to
replacing the quantity or quality of earnings that Elan gave up by selling
half of its Tysabri interest is based on: (A) the assumption that Elan sold
approximately half of its interest in Tysabri in the Tysabri Transaction,
which is Royalty Pharma's belief as set out in Royalty Pharma's previous
announcements; (B) Royalty Pharma view based on an assessment of Elan's pro
forma 2015E EPS calculated using public information as follows—(i) broker
consensus estimate for Elan's 2015E EPS post Tysabri Transaction of US$0.33
(based on a median of broker estimates from Leerink Swann, Credit Suisse,
Morningstar, Deutsche Bank, UBS, Jefferies, Berenberg, Davy Research, RBC,
Morgan Stanley and Cowen published between 6 February 2013 and 13 March 2013),
(ii) taking account of the estimated EPS impact of announced or completed
share repurchases and issuance (assuming future issuance/repurchase at the
Undisturbed Elan Stock Price), (iii) taking account of the estimates EPS
impact of Theravance royalties based on forecast sales of relevant products by
Evaluate Pharma on 13 May 2013, (iv) taking account of the estimated EPS
impact of AOP based on disclosed EBITDA of €15.5m (in Elan press release dated
20 May 2013), assumed depreciation and other expenses of €0.6m per year and
assumed tax rate of 25%, and (v) making no assumption of R&D savings or any
other changes in the earnings trajectory. On this basis, Royalty Pharma
calculates a pro forma Elan 2015E EPS of US$0.53 (US$0.33 post-Tysabri
Transaction plus US$0.06 impact of share repurchase, plus US$0.14 impact of
Theravance and AOP transactions). This figure is less than the Elan 2015E
consensus EPS of US$0.85 prior to the Tysabri Transaction (based on a median
of broker estimates from Leerink Swann, Credit Suisse, Deutsche Bank,
Jefferies, Cowen, Morgan Stanley and Exane BNP Paribas published between 24
October 2012 and 1 November 2012). This is not a profit forecast.

^^[2] See "Detail" section of announcement for analysis details.

^^[3] See "Detail" section of announcement for analysis details.

^^[4] Based on research commentary from Deutsche Bank (13 May 2013), Credit
Suisse (23 May 2013) and Evaluate Pharma (13 May 2013).

^^[5] Public documents state that Elan "performed their due diligence on
strictly publicly available information on the programs, and their own
internal outlook as to the future of the respiratory markets" – Theravance
Business Update call transcript, 13 May 2013, page 7.

^^[6] "Crown jewels" refer to UMEC/VI and FF combination therapy; potential
for cannabalization as per Morgan Stanley,19 April 2013.

^^[7] Royalty Pharma opinion based on, inter alia, (i) Thromboreductin
exclusivity is set to expire in 2014, (ii) Remodulin is subject to a
distribution agreement with data exclusivity expiring in 2014, (iii) Net
margin of 6.9% in 2011; Sources are: Elan's 20 May 2013 press release; Elan
EGM Circular, 27 May 2013; AOP website; financials from Capital IQ; Evaluate
Pharma; IMS Health, 2013.

^^[8] Based on upfront purchase price of €264 million and 75% of potential
milestones of €225 million (payable in the event that a program is abandoned
for any reason before 31 December 2017 (apart from "clinical failure", which
is defined as a "clinical event or clinical evidence which does not support
progression or continued development of a program on grounds of safety or
efficacy")) and 2012 EBITDA of approximately €16 million; EBITDA estimates
based on Elan press release dated 13 May 2013; Median transaction multiple of
13.5x based on median of Specialty Pharma transactions set out in Royalty
Pharma's presentation dated 28 May 2013.

^^[9] Based on 511,139,330 shares outstanding per Elan press release as of 31
May 2013 and a share price of $13.18 as of 7 June 2013.

^^[10] ^ Stated by ISS in "Agenda & Recommendations" section of its report on
Elan with a publication date of 3 June 2013. Stated by Glass Lewis in its
report on Elan with a publication date of 6 June 2013.

^^[11] Public documents state that Elan "performed their due diligence on
strictly publicly available information on the programs, and their own
internal outlook as to the future of the respiratory markets" – Theravance
Business Update call transcript, 13 May 2013, page 7.

^^[12] ^ Royalty Pharma opinion based, inter alia, that (i) Elan performed
their due diligence strictly on publicly available information, and (ii) that
only the heavily redacted contracts between Theravance and GSK were made
publicly available.

^^[13] Elan EGM Circular (Risk Factors Section, page 18, paragraph 3) dated 27
May 2013.

^^[14] Based on Elan Management's intention to distribute 20% of Theravance
cash flows as dividends (per Elan press release dated 13 May 2013).

^^[15] Based on research commentary from Deutsche Bank (13 May 2013), Credit
Suisse (23 May 2013), Evaluate Pharma (13 May 2013), and UBS (June 7).

^^[16] "Crown Jewels" refer to UMEC/VI and FF combination therapy.

^^[17] Jefferies equity research report, 13 May 2013.

^^[18] Based on extrapolation of broker forecast to 2021 through 2023 by
applying 2% terminal value growth rate.

^^[19] Approximate date of patent expiry, Morgan Stanley equity research, 19
April 2013.

^^[20] Royalty Pharma opinion based on, inter alia, (i) Thromboreductin
exclusivity is set to expire in 2014, (ii) Remodulin is subject to a
distribution agreement with data exclusivity expiring in 2014, (iii) Net
margin of 6.9% in 2011, (iv) a majority of AOP Orphan's sales are generated in
Central and Eastern European countries; sources are: Elan's 20 May 2013 press
release; Elan EGM Circular, 27 May 2013; AOP website; financials from Capital
IQ; Evaluate Pharma; IMS Health, 2013.

^^[21] Remodulin and Thromboreductin contribution to AOP Orphan revenue
mentioned in Elan Press Release, 20 May 2013; Thromboreductin loss of
exclusivity based on disclosure in Elan EGM Circular dated 27 May 2013;
Remodulin data exclusivity expires in 2014 per Standpoint Research, United
Therapeutics, 19 May 2012.

^^[22] Products with generic substitutes available include Thromboreductin,
Tadim, Esmocard, Nalbuphin Orpha, Adapend / Naltrexone, Canemes, Busilvex.

^^[23] AOP Orphan company website.

^^[24] BioCentury article (pages A13–A14) dated 27 May 2013.

^^[25] www.evaluategroup.com; www.clinicaltrials.gov.

^^[26] Based on announced investment of $70million and $143 million of
expenditure to-date, per Elan 20-F, 2012.

^^[27]Calculation based on 75% of certain milestones up to €225 million in
value at an exchange rate of 1.29079 USD/EUR. 

^[28] Elan EGM Circular dated 27 May 2013; AOP Share Purchase Agreement, 2013.

^^[29] 2013 Elan Q4 Earnings Call on 6 February (response to question from
Jack Gorman at Davy).

^^[30] Elan EGM Circular (p. 9-10) dated 27 May 2013.

^^[31] Based on expected dividend of approximately $0.15-$0.25 per share
(based on Evaluate Pharma projections out to 2016E for Tysabri / Theravance
sales) and Elan's ADS price of $13.18 as of 7 June 2013.

^^[32] Elan EGM Circular dated 27 May 2013.

^^[33] Analysis in this section is as set out in Royalty Pharma's presentation
released on 28 May 2013 and available on its website. Please see that
presentation for further details on the basis of calculation.

^^[34] 2015E and 2016E consensus EPS estimates pre-Tysabri transaction based
on median of broker estimates from Leerink Swann, Credit Suisse, Deutsche
Bank, Jefferies, Cowen, Morgan Stanley and Exane BNP Paribas published between
24 October 2012 and 1 November 2012

^^[35] 2015E and 2016E consensus EPS estimates following the Tysabri
transaction based on based on median of broker estimates from Leerink Swan,
Credit Suisse, Morningstar, Deutsche Bank, UBS, Jefferies, Berenberg, Davy
Research, RBC, Morgan Stanley and Cowen published between 6 February 2013 and
13 March 2013.

^^[36] Assumes that the Tysabri transaction ascribed a valuation of $3.25bn to
Elan's retained royalty participation, and that minimal net value was ascribed
to Elan's assets and liabilities other than the Tysabri royalty and its net
cash position, as set out in Royalty Pharma's previous announcements.

^^[37] Based on difference between EPS forecasts before and after the Tysabri
Transaction.

^^[38] ^ Pro forma EPS based on broker consensus estimates from retained
Tysabri royalty based on median of broker estimates from Leerink Swan, Credit
Suisse, Morningstar, Deutsche Bank, UBS, Jefferies, Berenberg, Davy Research,
RBC, Morgan Stanley and Cowen published between 6 February 2013 and 13 March
2013; Estimated EPS impact of announced or completed share repurchases and
issuance (assuming future issuance/repurchase at the Undisturbed Elan Stock
Price), and earnings impact of Theravance and AOP Orphan acquisitions; EPS
impact of Theravance royalties based on forecast sales of relevant products by
Evaluate Pharma on 13 May 2013; EPS impact of AOP Orphan based on disclosed
EBITDA of €15.5m, assumed depreciation and other expenses of €0.6m p.a. and
assumed tax rate of 25%; No assumption of R&D savings made in this
calculation. This is not a profit forecast.

^^[39] Royalty Pharma opinion that announced transactions do not come close to
replacing the quantity or quality of earnings that Elan gave up by selling
half of its Tysabri interest is based on: (A) the assumption that Elan sold
approximately half of its interest in Tysabri in the Tysabri Transaction,
which is Royalty Pharma's belief as set out in Royalty Pharma's previous
announcements; (B) Royalty Pharma view based on an assessment of Elan's pro
forma 2015E EPS calculated using public information as follows—(i) broker
consensus estimate for Elan's 2015E EPS post Tysabri Transaction of US$0.33
(based on a median of broker estimates from Leerink Swann, Credit Suisse,
Morningstar, Deutsche Bank, UBS, Jefferies, Berenberg, Davy Research, RBC,
Morgan Stanley and Cowen published between 6 February 2013 and 13 March 2013),
(ii) taking account of the estimated EPS impact of announced or completed
share repurchases and issuance (assuming future issuance/repurchase at the
Undisturbed Elan Stock Price), (iii) taking account of the estimates EPS
impact of Theravance royalties based on forecast sales of relevant products by
Evaluate Pharma on 13 May 2013, (iv) taking account of the estimated EPS
impact of AOP based on disclosed EBITDA of €15.5m (in Elan press release dated
20 May 2013), assumed depreciation and other expenses of €0.6m per year and
assumed tax rate of 25%, and (v) making no assumption of R&D savings or any
other changes in the earnings trajectory. On this basis, Royalty Pharma
calculates a pro forma Elan 2015E EPS of US$0.53 (US$0.33 post-Tysabri
Transaction plus US$0.06 impact of share repurchase, plus US$0.14 impact of
Theravance and AOP transactions). This figure is less than the Elan 2015E
consensus EPS of US$0.85 prior to the Tysabri Transaction (based on a median
of broker estimates from Leerink Swann, Credit Suisse, Deutsche Bank,
Jefferies, Cowen, Morgan Stanley and Exane BNP Paribas published between 24
October 2012 and 1 November 2012). This is not a profit forecast.

^^[40] Based on $80 million in expenditure reduction and 511,139,330 Elan
shares.

^^[41] ^ Specialty Pharma peers are: Allergan, Valeant, Shire, Forest, Warner
Chilcott, Alkermes, Cubist, Endo Health Solutions, Salix Pharmaceuticals, Jazz
Pharmaceuticals, Medicines Co. and multiples are sourced from Factset as at 7
June 2013.

^^[42] Based on EPS impact of $0.16 of $80 million in expenditure reduction
multiplied by a median specialty pharma P/E ratio of 11.0x; note that this
estimate has not been tax-affected.

^^[43] Based on Implied EPS calculations shown in table plus $1.72 per share
in additional EPS gained from $80 million in cost savings; note that this
estimate has not been tax-affected.

^^[44] Stated by ISS in "Agenda & Recommendations" section of its report on
Elan with a publication date of 3 June 2013. Stated by Glass Lewis in its
report on Elan with a publication date of 6 June 2013.

SOURCE Royalty Pharma

Contact: ENQUIRIES, Royalty Pharma, Pablo Legorreta, George Lloyd, Tel: +1 212
883 2275; J.P. Morgan (financial adviser), Henry Gosebruch (New York, Tel: +1
212 270 6000), Dwayne Lysaght / James Mitford / Christopher Dickinson (London,
Tel: +44 (0) 20 7742 4000); BofA Merrill Lynch (financial adviser), Philip
Noblet / Peter Luck / Geoff Iles (London, Tel: +44 (0) 20 7996 1000); Investec
(financial adviser), Tommy Conway / Jonathan Simmons (Dublin, Tel: +353 (0)1
611 5611); Abernathy MacGregor (PR adviser), Tom Johnson / Chuck Burgess, Tel:
+1 212 371 5999; Maitland (PR adviser), Tom Buchanan, Tel: +44 (0) 20 7379
5151; Mackenzie Partners (Information Agent), Daniel Burch ((cell) + 1 516 429
2722), Charles A. Koons ((cell) + 1 917 545 4523), Robert C. Marese ((cell) +
1 917 751 4085), Tel: + 1 212 929 5500 (Collect) or +1 800 322 2885 (Toll
Free)
 
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