Elan Corp. to buy Dura Pharmaceuticals Inc. for 5.64 times revenue, The

Weekly Corporate Growth Report, Sep 25, 2000

The Deal: The Elan Corp., an Irish drug maker, has agreed to purchase Dura Pharmaceuticals Inc. in a stock deal valued at $1.7 billion. The transaction continues Elan's aggressive trans-Atlantic buying spree. The acquisition will launch Elan into the respiratory and antibiotic therapy areas. Along with the expansion of products, Elan will double the size of its United States sales force ahead of expected launches of four new prescription medicines of its own. After the news of the acquisition was announced, shares of Dura rose $3 to $31.63 while Elan shares fell $3.19 to $48.94.

Discussion: Dura Pharmaceuticals Inc. markets specialty prescription pharmaceuticals that treat allergies, asthma, pneumonia and other respiratory complaints. Dura Pharmaceuticals' products are acquired from large pharmaceutical companies that have developed drugs but haven't put much marketing firepower behind them. Nearly 600 sales representatives market the company's products to primary care physicians, as well as allergists, pulmonologists, pediatricians and other specialists. In addition to its pharmaceuticals, the firm is developing a drug-delivery system with Eli Lilly for inhaled insulin products.

The Elan Corp. develops drugs and drug-delivery systems through its subsidiaries. Elan Pharmaceuticals focuses on neurology, pain management and cardiology. The subsidiary also markets Elan's products. Its Elan Pharmaceutical Technologies unit designs oral and transdermal delivery systems, while Elan Pharmaceutical Operations is the company's manufacturing arm.