Elan to Pay Shareholders Tysabri Dividends in Challenge to Bid

Elan Corp. said it will pay shareholders dividends from its royalties from multiple-sclerosis drug Tysabri in a challenge to a $6.5 billion bid from RP Management LLC for the Dublin-based drugmaker.

Biogen Idec Inc. on Feb. 6 agreed to buy Elan’s stake in the Tysabri drug for $3.25 billion in cash plus future royalties. The drug generated $1.6 billion in sales in 2012. Elan said today it will pay shareholders dividends directly linked to Tysabri’s market performance as a 20 percent share of the royalty received from Biogen Idec.

RP Management offered to buy Elan on Feb. 25, saying a sale would allow shareholders to avoid the substantial risks of Chief Executive Officer Kelly Martin’s plan to make purchases with the proceeds from Tysabri.

Martin said today that together with a $1 billion share-repurchase program announced Feb. 22 and plans to buy additional drug assets, the dividend provides shareholders “significant near- and longer-term benefits.”