King relents in Elan buy-out

King Pharmaceuticals has agreed to buy the rights to the Elan Pharmaceuticals primary care business in the US and Puerto Rico.

The deal includes the Irish firm's Skelaxin (metaxolone) and Sonata (zaleplon), but is $100m (€85m) below the price offered before Elan was investigated for unfair competition over Skelaxin, and SEC inquiries.

King subsequently pulled out of the $850m deal, which included the acquisition of Elan's primary care business in the United States and Puerto Rico.

Under the new terms, King will pay $750m (€636m) for the rights, including the transfer of stock worth $40m. Elan will also receive an additional $25m payment in January next year if Skelaxin retains patent exclusivity, plus 5% of net sales of the product through to the end of 2005, rising to 10% thereafter to 2021. The transaction is now expected to close by the end of June

Jefferson J. Gregory, chairman and ceo of King, said: "We are pleased to have reached a new agreement that permits us to proceed with the acquisition of Elan's primary care business, which includes Sonata and Skelaxin. The addition of Elan's dedicated primary care field sales force of approximately 375 individuals to our established sales and marketing capabilities should particularly well position Sonata for long-term growth and significantly enhance the Company's ability to successfully promote and grow our other branded prescription pharmaceutical products.'