Irish drug firm Elan is selling its north American commercialisation rights for the Frova migraine product to British biotech group Vernalis for around $55 million, Elan said this morning.
The deal with Vernalis will further help Elan on its road to recovery after the former stock-market high flier suffered a share price slump in 2002 on concerns about debts and an investigation by US regulators into accounting practices.
Frova is a prescription medicine used to treat migraine attacks. Elan recorded net revenue of $37.5 million for Frova in 2003, with gross profit of $8.1 million.
Elan, which has since eased concerns over its liquidity by raising more than $2 billion through disposals, said it would use proceeds from the deal to develop and launch late-stage pipeline candidates.
Vernalis said the transaction would boost its presence in its most important market, and added it planned a rights issue in the next 12 months to raise further funds.
Elan shares closed at €16.50 in Dublin yesterday, while Vernalis closed at 61-1/2 pence.
