June 1 (Bloomberg) -- Bristol-Myers Squibb Co. isn’t in talks to buy a stake in Elan Corp., the Irish drugmaker that’s seeking financing, according to UBS AG analysts.
“BMY has confirmed to us that it is not currently in talks to buy a minority stake in Elan,” Roopesh Patel and Keyur Parekh, New York-based analysts for UBS, wrote in a report today. Brian Henry, a spokesman for New York-based Bristol- Myers, said in an e-mail the company had “no comment on rumors and speculation.”
Elan in January said it hired Citigroup Global Markets Inc. to consider a merger, sale or strategic alliance as possible options to finance tests on its experimental drugs, led by bapineuzumab for Alzheimer’s, and repay $1.1 billion in debt due in 2011. A person familiar with the deal said yesterday that Bristol-Myers was in talks with the Dublin-based company.
Elan Chief Executive Officer Kelly Martin said April 22 the “preferred outcome” was a partnership with another drugmaker, including the sale of a minority stake.
Pfizer Inc., the world’s largest drugmaker, is acquiring Madison, New Jersey-based Wyeth for $65 billion. Merck & Co. of Whitehouse Station, New Jersey, is spending about $44 billion to buy rival Schering-Plough Corp. of Kenilworth, New Jersey. Bristol-Myers in March formed a group of top managers to pursue deals and drug development.
James Cornelius, Bristol-Myers chief executive officer, has said he is looking for acquisitions after the company finished 2008 with $8 billion in cash. Bristol-Myers had $7.8 billion in cash at the end of March, according to data compiled by Bloomberg.
Specialty Drugs
Elan, like Bristol-Myers, is focused on specialty drugs for multiple sclerosis, Alzheimer’s and Parkinson’s disease, the UBS analysts wrote. The value of a deal would have hinged on successful trials of bapineuzumab, which in our view has meaningful development risks,” according to the analysts, who have a “buy” rating on Bristol-Myers.
Niamh Lyons, a spokeswoman for Elan, declined to comment in an interview today. Representatives of the two companies previously had declined to comment on the report that they were in talks. Bristol-Myers was one of two contenders for a stake in Elan, the Wall Street Journal reported May 30.
Elan shares rose 34 cents, or 6.6 percent, to 5.40 euros at 12:33 p.m. in London. The stock surged as much as 10 percent. Markets in Dublin are closed for a national holiday.
Elan reported a first-quarter loss of $102.6 million, a 20 percent increase from a year earlier. Sales of its multiple sclerosis drug Tysabri, which is marketed with Biogen Idec Inc. of Cambridge, Massachusetts, rose 44 percent over the same period a year earlier, Biogen reported April 16. It is developing bapineuzumab for Alzheimer’s with Wyeth.
Elan’s shares rose 8.5 percent on May 5 on speculation that Danish drugmaker H. Lundbeck A/S would make a bid for the company.
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