Elan has announced a strategic business relationship with Massachusetts based Proteostasis Therapeutics that will see it take a 24% stake in the company.
The relationshop is aimed at advancing the Proeostasis platform for the discovery and development of disease modifying, small molecule drugs and diagnostics for the treatment of neurodegenerative disorders such as Parkinson's, Huntington's, multiple sclerosis and amyotrophic lateral sclerosis (ALS). It is also aimed at a broad array of dementia-related diseases including Alzheimer's.
Under the terms of the agreement, Elan has invested $20m into equity capital of Proteostasis and will have an opportunity to provide an additional $30m in collaboration funding over five years, with the possibility of a further five years. As part of the agreement, Elan will become an approximate 24% shareholder in Proteostasis.
It also has obtained a right of first negotiation to exclusively license compounds emerging from the combined initiative and will have the right to a seat on the Proteostasis board of directors as well as its scientific advisory board.
Elan chief executive Kelly Martin said that the deal will provide a multitude of opportunities for Elan to advance its position as a world leader in neuroscience.
'Importantly, and given the construct of the deal as a capital investment, this transaction is being consummated in a manner that will have a minimal near-term financial impact on our income statement and enable shareholders to realise the benefits of the operating leverage, embedded into our business, that combines expected double-digit revenue growth with a stable and well defined overall cost structure,' he said.
