Measuring the M&A payoff

While M&A transactions often prove to be disappointing value creation events, Alkermes plc has doubled its revenues and added $800 million in market cap on the back of its deal to acquire the Elan Drug Technologies business of Elan Corp. plc. Now the biotech has the scale to focus on advancing internal programs and launching its next drug by 2015.

Alkermes acquired the EDT division of Elan in May 2011 for $960 million in cash and stock. At the time, Alkermes said the deal would diversify its portfolio of marketed products, give it a steady and growing revenue stream, provide the financial resources to advance its internal pipeline and add multiple billions to its market cap over three to five years (see BioCentury, May 16, 2011)...