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Ebb & Flow

Of the $6.9 billion in biotech debt raised thus far in 2009, $1.9 billion (28%) was raised in the last two weeks through four financings: three bumped up deals by Elan Corp. plc (NYSE:ELN), Incyte Corp. (NASDAQ:INCY); and UCB Group (Euronext:UCB); and a fourth tied to the telaprevir rights of Vertex Pharmaceuticals Inc. (NASDAQ:VRTX).

Debt deals fell to only $2.6 billion last year with the across-the-board de-leveraging in the financial meltdown. But at this pace, biotech debt this year could reach the $10.3 billion raised in 2007.

Elan will use its $625 million to restructure old debt. EVP, CFO and head of Elan Drug Technologies Shane Cooke told Ebb & Flow the company will use the funds, along with an additional $225 million from this summer's Alzheimer's deal with Johnson & Johnson (NYSE:JNJ), to pay off $850 million in 7.75% notes due in 2011(see BioCentury, Sept. 21).

Elan has already issued a tender offer for the 2011 notes. The swap will reduce Elan's long-term debt to $1.54 billion from $1.77 billion and leaves it with more attractive debt maturity: $300 million in floating rate notes due in 2011; $465 million in 8.875% notes due in 2013; $150 million in floating rate notes due in 2013; and the newly issued 8.75% notes due in 2016.

Elan had proposed to sell $600 million in debt. Cooke said the offering was three times oversubscribed with a mix of existing and new investors.

Cooke said Elan expects to reach profitability by the end of 2010.

On the week, the stock shed $0.41 to $6.79. Separately, Elan disclosed that it received a subpoena from SEC for information on the announcements of two cases of

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