Irish drug-maker Elan will lay out an alternative strategy if shareholders reject a string of planned deals and thereby make a bid from a US-based investment group more likely to succeed.

Royalty Pharma last week increased its hostile cash bid for Elan, conditional on the target’s shareholders rejecting a series of planned transactions at a meeting on June 17th.

Elan, which rejected Royalty's offer, said yesterday there were different opinions among shareholders on one of the deals struck this month, with US company Theravance, and that it would look to quickly sooth concerns.

If that did not work, Elan chief executive Kelly Martin said the board would look at other ways to maintain the group's independence, though he did not specify what those plans would be.

“If the shareholders have a different opinion, I think what you will see is Elan immediately announce Plan B,”Mr Martin said when asked if he would continue with talks on other deals if shareholders rebuffed those already struck.

“There’s always a Plan B and a C... If they don’t think the strategy is particularly beneficial to them then the board will immediately have an alternative strategy that will be made clear very quickly.”

Elan sold its 50 per cent interest in Tysabri, a multiple sclerosis drug, to US partner Biogen Idec in February for $3.25 billion plus royalties, aiming to use the proceeds to reward investors and fund its spending spree.

It agreed to buy two private drug companies last week, following on from a separate $1 billion deal to buy 21 per cent of the royalties that Theravance receives from GlaxoSmithKline (GSK) .

Some analysts believe Elan overpaid to get a chunk of GSK’s respiratory drugs revenue, a view Elan does not share. Under Irish takeover rules it cannot present its forecasts for the deal while Royalty’s offer is still on the table. – (Reuters)