The announcement, unveiled along with a debt restructuring drive, marks the second time the Irish drugmaker has shelved plans to separate the unit from its core BioNeurology business in the last two years.
As it did on the previous occasion Elan cited unfavourable market conditions as the key factor in its decision but hinted that it may resurrect the sale in due course, reiterating that a divestiture would fit with the conclusions of a 2008 strategic review.
Spokesman Bob Purcell declined to say whether Elan had received any bids for EDT prior to its latest decision, but did tell in-pharmatechnologist the unit’s “revenue mix is shifting to recently approved drugs, such as Ampyra and Invega sustenna.”
This point is significant as H1 figures released in July showed sales of some of EDT's more established royalty and manufacturing revenue generating products are starting to fall as a result of generic competition.
For example, for the six months ended June 30, the revenue contribution from Abbott Laboratories’ Tricor, which uses EDT’s nanocrystal tech, dropped 29 per cent to $56m (€43m) while that from King Pharmaceuticals’ Skelaxin fell from $10.3m to just $400,000.
Speaking in July when these results were announced, Ian Hunter from Goodbody Stockbrokers told Reuters that: "If [Elan] are still looking at spinning [EDT] off, there may be a potential reduction in its valuation if revenues are going to continue coming off."
So, given that it cited valuation as the key to its latest decision, if Elan does plan to sell EDT in the future it will surely be hoping the delivery technology unit is able to sign new licensing deals to help maintain its value until the market is more conducive to a divestiture.
AD drug into phase III
In other news, Elan announced that, despite not meeting Phase II endpoints, its candidate Alzheimer’s disease drug, scyllo-inositol, was moving into Phase III assessment.
The compound is being developed by Elan’s BioNeurology unit in collaboration with partner Transition Therapeutics and is the most advanced of the five AD treatments in the Irish drugmaker’s pipeline.
Elan said that, while it did not achieve cognitive (NTB) and functional (ADCS-ADL) endpoints at Phase II, the drug was being taken to Phase III based on positive biomarker data and after discussions with experts in the field.
Last year Elan stopped two high-dose arms of the Phase II study after a number of serious adverse events, including several deaths.
However, subsequent analysis showed that: “no causal relationship between the drug and the deaths could be determined.”