This round goes to Elan. In the ongoing battle for control over the Irish drugmaker, a U.S. court judge gave the company a temporary reprieve from Royalty Pharma's hostile bid of $6.4 billion, Bloomberg reported. Elan says the bid low-balls the value of the company and its expected royalty stream from Biogen Idec's sales of Tysabri.
As news the service reported, the judge slapped a temporary restraining order on Royalty after Elan's complaint about its methods of attracting its investors to tender their shares. It's the latest proverbial turn of the screw since Royalty launched efforts to acquire Elan ($ELN) after the Irish biotech sold its ownership interest in the multiple sclerosis therapy Tysabri to Biogen ($BIIB) for $3.25 billion in February. The judge is expected to contemplate a preliminary injunction at a June 11 hearing.
Elan is seeking a court order that would have Royalty provide more details about its business and extend the deadline on its offer until June 30, well after the extraordinary meeting in the middle of this month.
"This is a kind of defense mechanism from Elan," Guillaume van Renterghem, an analyst at UBS AG in London, told Bloomberg. "This is a purely technical, legal move to make sure investors have all the required information in terms of Royalty Pharma's background."
The court win precedes the meeting of Elan shareholders on June 17 to decide whether to approve a string of transactions that Elan's management has triggered recently with the help of its Tysabri windfall. Royalty's latest bid of $12.50 per share hinges on Elan shareholders rejecting a $1 billion deal with Theravance ($THRX) for royalty rights on four late-stage respiratory drugs partnered with GlaxoSmithKline ($GSK). Theravance has high hopes for an approval of the deal.
Royalty, however, managed a small victory yesterday. Institutional Shareholder Services (ISS), the influential proxy advisory firm, recommended Monday against approval of Elan's proposed deals, Reuters reported. Royalty and others have called the deals a last-ditch effort of Elan's management to keep control of the company.