Trinity Biotech is believed to be discussing the possible purchase of a US diagnostics business owned by Elan, the struggling drugs group.
The business concerned is Elan Diagnostics, which makes and distributes blood test kits and agents for use in doctors' offices and clinical laboratories. Based in Rhode Island, it is believed to have annual revenues of about $30 million (€30.56 million) and employs about 55 staff.
While discussions are thought to have been under way for some time and may have already reached an advanced stage, it is not known whether Elan's significant trading difficulties will interrupt the process.
Elan said in its 2001 annual report on Tuesday that it planned to dispose of the business and another larger venture, Athena Diagnostics.
Last December, Elan sold about 20 per cent of Athena Diagnostics to a group of private investors for about $41.9 million.
The business is not core to Elan, which is attempting to streamline its operations through divestitures and focus on three therapeutic areas: neurology; pain management; and auto-immune diseases. Based in Bray, Co Wicklow, Trinity Biotech has a number of operations in the diagnostics area. It has acquired two such businesses since November, most recently on Monday.
Firms in the sector have changed hands in the recent past at about one-time revenues, suggesting Elan Diagnostics might be worth about $30 million. Any such deal would be far from the immediate priority at Elan, whose share price more than halved yesterday after a credit agency cut its rating to junk status.
The development compounded worries about the company's accounting policy, which, with other factors, has seen it shed more than 98 per cent of its value since the start of the year. It closed yesterday at €1.55.
Elan's chairman and chief executive, Mr Donal Geaney, said in the annual report that the company was going through the "most challenging" period in its history. Under investigation by the Securities and Exchange Commission in the US, promises by the company to simplify its financial reporting have failed to reassure investors.
