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Aug 13, 2012

Elan to Cut Loose Its Discovery Subsidiary

  • Elan says it plans to spin out its discovery science and Neotope Biosciences antibody therapeutics firm to shareholders. Elan itself will continue developing its Biogen Idec-partnered approved multiple sclerosis drug Tysabri for a range of potential additional and new indications, and progress the Phase II-stage small molecule candidate ELND005, a beta amyloid anti-aggregation agent. Elan will in addition retain its interest in Janssen AI, which in partnership with Pfizer is developing Elan’s Alzheimer’s Immunotherapy Portfolio (AIP).

    Neotope will continue to progress a drug discovery business platform, originally established in 2010, which is focused primarily on translating neo-epitope targets into potential treatments for chronic degenerative and other related diseases.

    Elan’s board says splitting the company into two separate entities is a logical move. “All of our previous actions, including most notably the separation of the Elan Drug Technologies Business and its merger with Alkermes as well as the establishment of Janssen AI with Johnson & Johnson in a sharing of the risk/reward around the AIP asset, have been designed to improve the risk/return profile of the company, cluster businesses, and assets logically for shareholders,” state Robert A. Ingram, Elan chairman, and Kelly Martin, CEO.

    “By establishing Neoptope Biosciences and Elan as distinct businesses, each with its own specific business characteristics and dynamics, we provide investors with important clarity, transparency, and choice as it relates to their investment decisions,” Mr Martin continues. “The completion of this transaction is a natural progression and final step to becoming a company that generates both profits and growth to the benefit of stakeholders. The dominant focus will be broadening and deepening patient access to Tysabri on a global basis and registering ELND005 for multiple indications in neuropsychiatry and other symptomatic indications. This move to immediate profitability will enable us to utilize the benefit of the significant accumulated losses that have been built up over the years.”

    Announcement of the decision to split Neotope off from Elan isn’t, however, related to the recent Phase III failure of bapinezumab, the lead amyloid β-targeting candidate in the Janssen AI-Pfizer AIP portfolio, the firm stresses. “Our board and management team have spent the previous twelve months assessing the optimal alignment of assets, risk/reward, and income statement dynamics to the marketplace and our shareholders,” Martin and Ingram stress. “These discussions took place well in advance of the recent release of the topline outcomes of the bapinezumab Phase III trial.”

    Elan is estimating a successful post spinout transaction EBITDA in excess of over $400 million in 2013, and net income of over $250. The firm reported 2011 revenues of $1.2 billion.

    Neotope is focused on developing antibodies against neo-epitope targets for the treatment of diseases which may be caused by protein dysfunction due to misfolding, aggregation, and accumulation. A neo-epitope is an epitope that is present on a protein target as a result of protein modification, such as cleavage, covalent modifications such as phosphorylation, or misfolding. The neo-epitopes targeted primarily by Neotope are those associated with a pathological process.

    The firm’s preclinical pipeline includes antibodies targeting primary (AL) amyloidosis, Parkinson’s and Alzheimer’s diseases, and type 2 diabetes. Neoptope's lead AL amyloidosis program is a monoclonal antibody that specifically targets the misfolded immunoglobulin light chain aggregates and amyloid deposits resulting from proliferating B cells. Its Parkinson’s disease program aims to develop antibodies that target the aberrant, self-propagating forms of alpha-synuclein, and the Alzheimer’s disease research is focused on developing anti-tau protein antibdodies. Neotope’s Type 2 diabetes program is looking at the potential for using antibodies to reduce the progressive increase in glucose levels in animal models of the disease. 


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