Elan neurology, autoimmune news

Elan announced plans to retain its late stage and marketed assets and spin out its discovery and early stage programs into a public company called Neotope Biosciences plc. Elan said splitting the company would better align timelines for shareholders with respect to those who are interested in short term vs. long term value. The newco will be incorporated in Ireland with operations in South San Francisco, Calif., and will have about 80 employees. Elan will seed Neotope with $120-$130 million and retain a 14-18% stake in the newco, which is expected to list on a U.S. exchange by year end. Neotope will develop therapeutics targeting alpha synuclein (SNCA), melanoma cell adhesion molecule (MCAM; MUC18; CD146), tau and amyloid, and hopes to submit three INDs by 2015.

As a result, Elan said it will immediately become profitable, with an expected 2013 EBITDA of about $400 million in 2013 and an EPS target of $1 by 2015. Elan will retain autoimmune drug Tysabri natalizumab, for which it recognized 2Q12 revenue of $288 million. The company markets the drug in the U.S., while partner Biogen Idec Inc. (NASDAQ:BIIB, Weston, Mass.) markets it elsewhere. Elan will focus on additional indications for Tysabri, including secondary-progressive MS for which the mAb is in Phase III testing, as well as ELND005, a formulation of scyllo-inositol that the company plans to test in symptomatic Alzheimer's disease indications such as bipolar disorder. In 2010, the product missed the co-primary endpoints in a Phase II trial in AD. Elan plans on starting a Phase II trial of ELND005 in bipolar disorder by year end (see BioCentury, Aug. 16, 2010). ...