Elan is facing questions from activist investor Ib Sonderby about the cut-rate sale price for U.S. rights to the pain drug Prialt, which went to Azur Pharma International for $14.6 million. Apparently, three Elan board members also own stock in Azur Pharma. And Sonderby demands to know just how much.
Prialt is hardly a blockbuster drug. It has been a big disappointment to the company, posting U.S. sales of only $20 million for 2009, Reuters reports. But the drug had a high profit margin and cost little to market, and Elan sold it off for less than one year's U.S. revenue.
"Elan sold EU rights for Prialt to Eisai for $100 million," Sonderby writes in a letter to shareholders. "Couldn't they have received at least an equal amount for the more valuable U.S. rights?" Plus, Sonderby says, Elan didn't bother to disclose either the sale price or the fact that board members had financial ties to the buyer. Nor did it tell shareholders that Elan Chairman Kyran McLaughlin is also vice chairman of an investment group that owns 44 percent of Azur Pharma, Sonderby says.
These latest questions come on top of Sonderby's July complaints that Elan was being mismanaged. He hasn't been satisfied with the company's response, he tells Reuters.
- read the Reuters news