Elan Corporation (ELN)

Amarin is a specialty pharmaceutical company focused on neurology and pain management. Mr. Thomas Lynch, a former employee and executive vice chairman, and Mr. John Groom, a former director of Elan, serve on Amarin’s board of directors. Mr. Lynch is non-executive chairman of Amarin.

In 2001, we entered into a distribution and option agreement with Amarin, whereby Amarin agreed to market and distribute Permax^tm (pergolide mesylate) in the United States, and Amarin was granted an option to acquire rights to the product from us. We subsequently provided a loan of $45.0 million to Amarin in 2001. Permax is used for the treatment of Parkinson’s disease. The terms of the distribution and option agreement and the loan agreement were subsequently amended in 2001 and 2003.

During 2001, we also granted Amarin a purchase option to acquire Zelapar^tm (selegeline). Zelapar is a fast melt formulation of selegiline for the treatment of Parkinson’s disease.

In February 2004, we further amended our contractual arrangements subject to the sale by Amarin of certain of its assets, including its rights to Zelapar and Permax, to Valeant Pharmaceuticals International (Valeant). On 25 February 2004, Amarin’s sale of assets to Valeant closed and the amendments became effective. The amendments required, in full settlement of all previous liabilities owed by Amarin to us and as a deemed exercise of Amarin’s option to acquire Zelapar, the payment by Amarin of $17.2 million to us and the issuance of a $5.0 million five-year 8% loan note and issued warrants to purchase 500,000 ordinary shares in Amarin to us. Under the agreements, we were also entitled to receive a $1.0 million milestone payment upon the successful completion of certain Zelapar safety studies. The milestone was received in December 2004. We are also entitled to receive from Valeant a revenue contingent milestone on Zelapar of $10.0 million if annual sales of Zelapar exceed $20.0 million, and royalties on future net sales by Valeant of 12.5% for Zelapar and 10% for Permax. As a consequence of these amendments, Amarin paid us $17.2 million in February 2004.

In February 2004, our share ownership in Amarin increased to approximately 28% on a fully diluted basis. Prior to 30 September 2004, we accounted for Amarin using the equity method based on our equity investment in Amarin. Amarin was a related party to us until this date. On 30 September 2004, we sold all of our remaining investments in Amarin (comprising the share ownership and $5.0 million loan note described above) for $6.5 million to Amarin Investment Holding Ltd., a company controlled by Mr. Thomas Lynch. We obtained an opinion from an internationally recognised investment bank that the consideration received for this transaction reflected fair value for these investments at the date of sale.

Net revenue earned from Amarin was $Nil for 2005 (2004: $3.0 million).

 

Amarin Corporation, plc (Amarin) is a specialty pharmaceutical company focused on neurology and pain management. Thomas Lynch, a former employee and executive vice chairman, and John Groom, a former director of Elan, serve on Amarin’s board of directors. Mr. Lynch is non-executive chairman of Amarin.

 

In 2001, we entered into a distribution and option agreement with Amarin, whereby Amarin agreed to market and distribute Permax^tm (pergolide mesylate) in the United States, and Amarin was granted an option to acquire rights to the product from us. We subsequently provided a loan of $45.0 million to Amarin in 2001. Permax is used for the treatment of Parkinson’s disease. The terms of the distribution and option agreement and the loan agreement were subsequently amended in 2001 and 2003.

 

During 2001, we also granted Amarin a purchase option to acquire Zelapar^tm (selegiline). Zelapar is a fast melt formulation of selegiline for the treatment of Parkinson’s disease.

 

In February 2004, we further amended our contractual arrangements subject to the sale by Amarin of certain of its assets, including its rights to Zelapar and Permax, to Valeant Pharmaceuticals International (Valeant). On February 25, 2004, Amarin’s sale of assets to Valeant closed and the amendments became effective. The amendments required, in full settlement of all previous liabilities owed by Amarin to us and as a deemed exercise of Amarin’s option to acquire Zelapar, the payment by Amarin of $17.2 million to us and the issuance of a $5.0 million five-year 8% loan note and issued warrants to purchase 500,000 ordinary shares in Amarin to us. Under the agreements, we were also entitled to receive a $1.0 million milestone payment upon the successful completion of certain Zelapar safety studies. The milestone was received in December 2004. We are also entitled to receive from Valeant a revenue contingent milestone on Zelapar of $10.0 million if annual sales of Zelapar exceed $20.0 million, and royalties on future net sales by Valeant of 12.5% for Zelapar and 10% for Permax. As a consequence of these amendments, Amarin paid us $17.2 million in February 2004.

 

In February 2004, our share ownership in Amarin increased to approximately 28% on a fully diluted basis. Prior to September 30, 2004, we accounted for Amarin using the equity method based on our equity investment in Amarin. Amarin was a related party to us until this date. On September 30, 2004, we sold all of our remaining investments in Amarin (comprising the share ownership and $5.0 million loan note described above) for $6.5 million to Amarin Investment Holding Ltd., a company controlled by Mr. Thomas Lynch. We obtained an opinion from an internationally recognized investment bank that the consideration received for this transaction reflected fair value for these investments at the date of sale.

 

Net revenue earned from Amarin was $Nil million for 2005 (2004: $3.0 million; 2003: $0.3 million).