Biotech Buys MS Drug Rights

Written By Brian Hicks

Posted February 8, 2013

In a deal worth $3.25 billion, Biogen Idec (NASDAQ: BIIB) will buy all rights to Tysabri, a major multiple sclerosis drug, from Elan Pharmaceuticals, Biogen’s partner and the drug’s developer.

Elan would receive a royalty of 12 percent of Tysabri sales for the first year and, after that, 18 percent of sales up to $2 billion and 25 percent of any sales beyond that.

For reference, Tysabri sales in 2012 amounted to $1.6 billion (an increase of 8 percent over 2011).

Biogen expects a decent increase in earnings through this year.

Forbes quotes Tony Kingsley, Biogen’s head of marketing:

“We have been the commercial lead in the product,” says Kingsley. “We’re the only people with commercial resources, the only people with marketers and sellers we’ve worked jointly on the strategy with Elan.”

Tysabri was withdrawn after its 2004 approval when it was reported that it raised the risks of a fatal brain infection. Biogen and Elan successfully brought the drug back to market after improvements, and sales have been strong ever since.

Now, with the biotech gaining full rights to the drug, it can consolidate its MS offerings, which also include Avonex and Tecfidera.

The news sent Biogen shares up $6 to $166.48 on Wednesday before the market opened. It was up again 2.96% on Friday morning.


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