Elan may put itself up for sale

Irish drugmaker Elan denied buyout talks with Pfizer, but it's talking loud and clear about going on the block. The company has hired Citigroup Global Markets for the old "review of strategic options" trick, and one of those options--as usual--is finding a buyer. "The range of alternatives that will be assessed could include minority investment or strategic alliance, a merger or sale," the company announced.

The aim? Getting hold of enough financial resources, and the proper commercial infrastructure, to jump-start its pipeline and milk its existing products more thoroughly. As you know, Elan partners with Biogen Idec on the multiple sclerosis drug Tysabri, which has run into difficulties recently because four patients developed the brain disease progressive multifocal leukoencephalopathy, or PML. That potentially fatal condition pushed Tysabri off the market several years ago, but this time--at least so far--regulators have simply updated the drug's label to reflect the new cases. Meanwhile, Tysabri has garnered an additional indication for Crohn's disease in the U.S.

Elan is also hitched up with Wyeth in a development deal for an Alzheimer's med now in Phase II trials. The two partnerships would muddy the waters in any deal with a third party, analysts told MarketWatch. "The prospect of a third party investing or collaborating with Elan on its other pipeline projects is of course possible--though this could potentially complicate the partnership structures that exist and would need to be clearly structured," the Irish brokerage Davy said.

Might Wyeth or Biogen Idec bite? It's possible, though Wyeth is already in the throes of negotiating a buyout of Dutch vaccine specialist Crucell. We'll see what ideas Citi comes up with.

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