Elan has entered biotech deals and decides to divest ELND005 to, Speranza Therapeutics, focused on progressing the development of ELND005 (Scyllo-inositol).
Leading to the biotech deals, 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 in the biotech deals.
Elan will commit $70 million to the new entity upfront as part of the biotech deals (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.
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