Elan ponders value of spinning off its drug discovery unit

If the split happens, we would likely see two publicly listed companies

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DUBLIN—Elan Corp. has decided to explore the possibility of a separation of its Elan Drug Technologies (EDT) business from the rest of the company. If this action is indeed executed, it would create two distinct publicly listed companies: Elan BioNeurology and EDT, with each entity being a leader in its field of expertise.

Elan is announcing the idea, and taking time to explore it, in order to, as it says, "accurately assess the opportunity and impact on shareholder value."

On an operating basis, both EDT and BioNeurology are now profitable, Elan notes. However, they each represent "vastly different investment propositions," and each generates distinct and ongoing capital requirements for utilization against a broad array of potential opportunities.

The company's review will include detailed assessment of the possible separation, including timing, market conditions and the impact on all of its key constituencies.

The company expects to make a decision whether to proceed in the coming months, but that is as specific as it will get; no specific timetable has been set for completion of the review, and the company notes that "there can be no assurances that such a transaction will take place." 

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