Elan Corp says it has decided to put off a sale or spin-off of its drug delivery unit and unveiled plans to restructure its debts.

The Irish company says it has completed an evaluation of Elan Drug Technologies and “concluded that it makes strategic and financial sense to separate the business, provided that a separation can be done at an appropriate valuation”. However, given that “market conditions at this time are not conducive”, it is not selling the business “at this time”.

Elan said it was happy “with the strong performance of the EDT business and is particularly pleased with the solid launch” of the multiple sclerosis treatment Ampyra (dalfampridine), a product licensed to Acorda Therapeutics and which has “significant potential”.

The Dublin-headquartered firm added up that it expects to retire up to $500 million in outstanding debt due to mature in November 2011 and November 2013, respectively, “through a combination of cash on hand and the proceeds of a contemplated refinancing”.

Alzheimer drug goes into Phase III despite failure
Elan and partner Transition Therapeutics also revealed that they will begin a Phase III trial of an Alzheimer's drug known as ELND005, even though a mid-stage study did not achieve statistical significance on its primary cognitive and functional outcome measures. However, the drug appeared safe and had a biological effect on amyloid-beta protein in the cerebrospinal fluid of patients from whom such samples were available.

The companies said they have agreed to “work together to systematically explore all strategic, operational and global options for the asset". Ian Hunter, an analyst at Dublin stockbroker Goodbody, said he understands this means that the partners will be looking for a partner to share the risk/benefit through the next development phase.

Elan chief executive Kelly Martin said the financial plans, strategic initiatives and the news on ELND005 “underscore our unwavering commitment to building value for shareholders and developing our robust pipeline”. He added that “we continue to carefully manage both our balance sheet and cost structure to ensure that we remain financially strong”.