Alkermes, Inc. and Elan Corporation, plc today announced the
execution of a definitive agreement under which Alkermes will merge with Elan
Drug Technologies (EDT), the profitable, world-class drug formulation and
manufacturing business unit of Elan, in a cash and stock transaction currently
valued at approximately $960 million. Alkermes and EDT will be combined under a
new holding company incorporated in Ireland. This newly created company
will be named Alkermes plc.

The transaction is expected to be immediately accretive to
cash earnings and accelerates Alkermes’ path to building a sustainably profitable
biopharmaceutical company with expertise in developing treatments for central
nervous system (CNS) diseases and a broad, diversified portfolio of products
and pipeline based on proprietary science and technologies. Alkermes plc will
have diverse revenue streams from 25 commercialized products, with future
near-term growth expected to be driven by five major products: RISPERDAL®
CONSTA®, INVEGA® SUSTENNA®, AMPYRA®, VIVITROL® and BYDUREON™. The combined
company is expected to have growing product, royalty and manufacturing revenues
in excess of $450 million annually and resources to prudently invest in an
innovative pipeline of proprietary drugs. 

 “The merger will be
financially transformative and create a profitable, global biopharmaceutical
company with a diversified CNS product portfolio and a strong foundation for
growth,” stated Richard Pops, Chief Executive Officer of Alkermes. “Both
companies have a proven track record as innovators. This merger will bring the
scale and resources for strategic and balanced investment across the whole
product continuum, from R&D innovation to clinical development, to
world-class manufacturing and commercial expansion. We’re looking forward to
working with the EDT team to accelerate growth and to create value for our shareholders
and the patients we serve.”

Kelly Martin, Chief Executive Officer of Elan plc commented that “upon closing,
this transaction aggressively advances a number of long-standing strategic and
financial objectives for Elan. Namely, it enables us to reduce the debt on our
balance sheet and further improve our capital structure, increases operating
leverage, allows for additional focus and continued disciplined investment in a
broad array of opportunities within the neurology space from a scientific, clinical
and product point of view and lastly, provides Elan shareholders with the
opportunity to realize further value – over time – from the equity position in
Alkermes plc.”  

 “The combination of
Alkermes and EDT is a strong strategic fit at the right time when both
businesses are strong and positioned for growth. With EDT’s two recently
approved drugs, INVEGA SUSTENNA and AMPYRA, driving revenue growth, the EDT
business is an ideal complement to Alkermes’ portfolio of approved and
development-stage drugs,” stated Shane Cooke, Executive Vice President and Head
of EDT. “This combination creates opportunities for our employees and provides
a platform for future growth.”