What’s Next for Elan Corporation, plc (ADR) (ELN)?

Elan’s appeal

In Elan Corporation, plc (ADR) (NYSE:ELN)’s mission to reinvent itself, it spun off Prothena Corporation PLC (NASDAQ:PRTA) in December 2012. The company focuses on the discovery and development of potential therapeutic monoclonal antibodies directed specifically to disease causing proteins.

Since trading as a standalone, shares have nearly doubled. In addition, it was just added to the Russell Global Index. The company also caught the eye of a couple of analysts.

Wedbush just assumed coverage, issuing an “outperform” rating and $18 price target. Roth Capital recently initiated coverage with a “buy” rating and $16 price target.  Elan retains 18% of Prothena.

Elan Corporation, plc (ADR) (NYSE:ELN)’s appeal stretches beyond the spin-off and $3.25 billion in cash it received from Biogen and Tysabri royalties. Interested U.S. based drug makers find the Dublin, Ireland’s corporate friendly tax rate quite attractive.  While Elan shareholders are enjoying the renewed interest that is being showered on shares, many would be glad to see the company sold. It’s been one rocky road for investors.

A series of serious setbacks stemmed from rare brain infections linked to Tysbari and disappointing results from several highly anticipated Alzheimer’s studies, performed in conjunction with Johnson & Johnson (NYSE:JNJ) and Pfizer Inc. (NYSE:PFE) had sent the once high-flying biotech company all the way down to single digits.  Its recovery, still makes some nervous.

Royalty Pharma still interested

While Royalty Pharma’s bid expired in June, Bloomberg reports the company is not giving up.  According to analysts, Royalty Pharma is mulling over a new offer for Elan, this time with a partner.  However, there are obstacles standing in Royalty’s way. Elan currently isn’t accepting joint bids in the company’s auction, so Royalty would have to negotiate such terms with Elan.

Elan Corporation, plc (ADR) (NYSE:ELN) management hints it would be interested in a cash deal of $15-$20. Analysts at Jefferies say Elan could indeed fetch as much as $19.

Let the bidding begin..

The article What’s Next for Elan? originally appeared on Fool.com.

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