Irish drugmaker Elan has once again spurned the advances on Royalty Pharma, despite the latter having upped its bid to $12.50 a share, or around $6.4 billion.
The offer, which was raised from an earlier bid of $11.25 a share, is, however, contingent upon shareholders rejecting the stream of recent deals by Elan to help protect itself from a hostile takeover.
Earlier this year, Elan sold around half of its stake in multiple sclerosis drug Tysabri to partner Biogen Idec for $3.25 billion and royalties up to 25%.
This was followed by a £1-billion deal with Theravance for access to royalties from four of its respiratory drugs, and the recent purchases of two private drugmakers - AOP Orphan Pharmaceuticals AG and NewBridge Pharmaceuticals.
It seems that Elan is pulling out all the stakes to retain its independence, and chairman Robert Ingram has slammed Royalty's latest bid for "grossly" undervaluing the company's current business platform and future prospects.
"This offer is no more than an opportunistic attempt to acquire our company at a substantial discount at our shareholders' expense," he said.
In a letter to its shareholders, the board reasoned that the new offer fails to properly value the Tysabri asset, which, it says, will generate income for many years to come and has "a multitude of potential additional life cycle opportunities".
Furthermore, Royalty Pharma as a private limited partnership will capture any and all future Elan growth for the sole benefit of its limited partners, the firm warned, and stressed that "eliminating Elan as a publicly held entity will forever remove the opportunity, for you our Shareholders, to capture future growth and increases in value generated by current and future assets".
But Royalty argues that the increased offer represents a compelling value for Elan’s Tysabri Royalty, a 42% premium to the $3.25 billion at which Elan sold its interest in the drug to Biogen. It also represents a premium of 45% to the Undisturbed Elan Enterprise Value, the firm said in a letter to Elan's shareholders.
Royalty also reduced the acceptance threshold for its increased bid to 50% plus one share to help it garner enough support to drag the Irish drugmaker under its wing.