Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Post-Tysabri, Will Elan Waste The Windfall?

It was no secret that Biogen Idec (NASDAQ:BIIB) wanted to gain 100% control of the successful MS drug Tysabri, but it was likewise no secret that the company had virtually no interest in acquiring its partner Elan (NYSE:ELN). As a result, Wednesday's announcement that Biogen Idec will buy all rights to Tysabri looks like a win for the company, provided the drug continues to grow.

The question is whether Elan shareholders will really benefit from this deal. Pulling forward the Tysabri revenue stream certainly de-risks part of the story, but now investors have to contend with the question of how management will handle that cash. At this point, I'm not optimistic as the plans laid out...

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