Antler Science Two Limited
pursuant to Rule 425 of the
Securities Act of 1933 and
deemed filed pursuant to
Rule 14a-12 of the
Securities Exchange Act of 1934
Subject Company: Alkermes, Inc.
Commission File No.: 001-14131
ELAN REGULATORY INFORMATION RELATING TO MERGER TO CREATE ALKERMES, PLC
Elan Corporation plc (Elan) today issued a joint press release with Alkermes, Inc (Alkermes)
announcing that Elan and Alkermes have entered into a definitive merger agreement under which, and
subject to the conditions set forth therein, the Elan Drug Technologies (EDT) business of Elan and
the business of Alkermes will be combined (the Merger). Upon the closing of the transaction, EDT
and Alkermes will become wholly-owned subsidiaries of a newly created Irish headquartered company,
Alkermes, plc, which will be traded on NASDAQ and in which Elan will be a 25% shareholder.
Under the terms of the transaction, which has been unanimously approved by the boards of directors
of both companies, Elan will also receive US$500 million in cash. The total consideration
receivable by Elan (cash and equity in the form of 31.9 million shares of ordinary shares in
Alkermes, plc) is currently valued at approximately $960 million (based on the closing price of
Alkermes common stock on 6th May 2011). The transaction is subject to approval by the
stockholders of Alkermes and satisfaction of other customary closing conditions and regulatory
This notification contains additional information required to be published by Elan as a result of
the classification of the transaction under the listing rules of the Irish Stock Exchange (Listing
Rules) as a Class 2 disposal, and otherwise required under the Listing Rules or in connection with
the outstanding Elan bonds.
EDT, one of the worlds leading drug delivery businesses, is a business unit of Elan. As a fully
integrated drug delivery business, EDT delivers clinically meaningful benefits to patients, by
using its extensive experience and proprietary delivery technologies in collaboration with
pharmaceutical companies. For over 40 years, EDT has been, and continues to be, a drug delivery
provider of choice for a broad range of pharmaceutical companies, including many of the worlds
leading pharmaceutical companies. To date, over 40 products have been developed using EDTs
technologies and are used by millions of patients each day. For more information, go to
www.elandrugtechnologies.com. At 31 December, 2010 gross assets of EDT were $449.9 million
and the operating profit for the EDT business in respect of the year ended 31 December, 2010 was
Benefits of the Transaction
The Merger advances a number of long standing strategic and financial objectives for Elan. As Elan
currently intends to use the net cash proceeds of the transaction to reduce its indebtedness, the
transaction is expected to improve Elans capital structure, while increasing operating leverage,
and allowing for additional focus and continued disciplined investment in a broad array of
opportunities within the neurology space from a scientific, clinical and product point of view.
Elans ownership of 31.9 million ordinary shares in Alkermes, plc also provides Elan and its
shareholders with the opportunity to participate in further value creation in the combined company.
In connection with the transaction, Elan and Alkermes will enter into a Shareholders Agreement in
respect of the Alkermes, plc ordinary shares to be owned by Elan upon the closing of the
transaction (the Shares). The Shares will be held by a wholly owned subsidiary of Elan (the Elan
Shareholder), who will also be a party to the Shareholders Agreement, the Elan Shareholder will be
subject to certain limitations on the disposition of the Shares, as more fully described in the
Shareholders Agreement. During the six month period following the closing of the transaction, the
Elan Shareholder may not dispose of any Shares. Following that six month period, the Elan
Shareholder may dispose of Shares only pursuant to qualifying marked registered offerings.
Following the completion of two qualifying offerings, the Elan Shareholder may dispose of Shares,
without restriction, to certain permitted institutions described in the Shareholders Agreement,
subject to the limitation that, in any directly-negotiated disposition or any sale pursuant to Rule
144 of the U.S. Securities Act of 1933, the Elan Shareholder may not sell more than 6.25% of the
then total outstanding Alkermes, plc ordinary shares to any third party purchaser. In any event,
the Elan Shareholder may dispose of Shares to Elan or another wholly owned subsidiary of Elan or
pursuant to any capitalization, consolidation, merger, scheme of arrangement or other business
combination transaction involving Alkermes, plc and recommended by the board of Alkermes, plc or
approved by the shareholders of Alkermes, plc or pursuant to any tender, exchange or other similar
offer made for Alkermes, plc ordinary shares in respect of which the Board of Alkermes, plc has
either recommended that shareholders tender their shares or failed to recommend that shareholders
reject the offer within 10 business days following the commencement thereof. Any decision in
relation to the future disposal of some or all of the shareholding in Alkermes, plc, where
permitted under the Shareholders Agreement, would be made by the board of Elan having regard to
the prevailing circumstances.
During the one year period following the closing date of the Merger, the Elan Shareholder is
obligated to vote the Shares in accordance with the recommendation of the board of directors of
Alkermes, plc. Following the completion of this 12 month period, provided the Shares represent 15%
or less of the issued ordinary share capital of Alkermes, plc or the Alkermes, plc 30 day average
share price is less than 50% of the Alkermes share price on the closing date of the Merger, then
the Elan Shareholder is free to vote the Shares in any manner it determines.
Board & Management Changes
As part of the Merger, Shane Cooke, will join Alkermes, plc on the closing date of the Merger as
President. Mr Cooke has today stepped down as Chief Financial Officer of Elan and remains as
Executive Vice President and Head of EDT. Effective immediately, Mr. Nigel Clerkin is appointed as
Executive Vice President and Chief Financial Officer of Elan. Mr. Clerkin previously served as
Elans Senior Vice President, Finance & Group Controller since January 2004. Upon closing of the
Merger, Mr. Cooke will retire from the board of directors of Elan.
In connection with the consummation of the transaction, EDT will initially be sold by a restricted
subsidiary of Elan, in its entirety, to the Elan Shareholder, which is an unrestricted subsidiary
of Elan under the indentures governing Elans outstanding bonds. The aggregate consideration to be
received by the restricted subsidiary in connection with the sale will be $961.6 million,
consisting of $721.2 million in cash (representing not less than 75.0% of the aggregate sale
consideration), payable upon the consummation of the Merger, and preferred shares, with a
liquidation preference of $240.4 million (representing not more than 25.5% of the aggregate sale
consideration). Elans indentures require that that it use the net cash proceeds, within 365 days,
to either re-invest in its business or to purchase or repay outstanding bonds on a pro-rata basis.
The sale will constitute an asset sale under Elans indentures and the $721.2 million of
resulting cash consideration (after deducting certain direct costs and expenses relating to the
sale) received by the restricted subsidiary will constitute net cash proceeds, which will be used
by Elan in accordance with the terms of its indentures. Elan currently intends to use the net cash
proceeds, in whole or in part, to reduce its outstanding indebtedness.
The foregoing descriptions of the Merger Agreement (including the form of Shareholders
Agreement attached as an exhibit thereto) and the transaction contemplated thereby is not complete
and is subject to and qualified in its entirety by reference to the Merger Agreement (including
the form of Shareholders Agreement), a copy of which is attached as an exhibit to a Report of
Foreign Issuer on Form 6-K furnished by Elan to the SEC on the date hereof and the terms of which
are incorporated herein by reference.
The Merger Agreement (including the form of Shareholders Agreement) has been included to
provide Elans investors and security holders with information regarding their respective terms.
It is not intended to provide any other financial information about Elan, EDT or any of Elans
subsidiaries or affiliates. The representations, warranties and covenants contained in the Merger
Agreement were made only for purposes of that agreement and as of specific dates; were solely for
the benefit of the parties to the Merger Agreement; may be subject to limitations agreed upon by
the parties, including being qualified by confidential disclosures made for the purposes of
allocating contractual risk between the parties to the Merger Agreement instead of establishing
these matters as facts; and may be subject to standards of materiality applicable to the
contracting parties that differ from those applicable to investors. Investors should not rely on
the representations, warranties and covenants or any description thereof as characterizations of
the actual state of facts or condition of Elan, EDT or any subsidiary of Elan. Moreover,
information concerning the subject matter of the representations, warranties and covenants may
change after the date of the Merger Agreement, which subsequent information may or may not be fully
reflected in public disclosures by Elan.
connection with the proposed merger, Alkermes plc will file with the
Securities and Exchange Commission (SEC) a registration statement
that will include a preliminary prospectus regarding the proposed
merger and Alkermes, Inc. will file with the SEC a proxy statement in
respect of the proposed merger. The definitive proxy statement/prospectus will be mailed to the stockholders
of Alkermes, Inc. INVESTORS ARE URGED TO CAREFULLY READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS AND OTHER
MATERIALS REGARDING THE PROPOSED MERGER WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT ALKERMES,
INC. AND EDT AND THE PROPOSED TRANSACTION. Investors may obtain a free copy of the registration statement and the proxy
statement/prospectus when they are available and other documents containing information about EDT and Alkermes, Inc., without charge,
at the SECs website at www.sec.gov. Copies of the proxy statement/prospectus and the filings with the SEC that will be incorporated by
reference in the proxy statement/prospectus can also be obtained, when available, without charge, from Elans website www.elan.com.
This communication does not constitute an offer to sell, or the
solicitation of an offer to sell, or the solicitation of an offer to subscribe for, or buy, any securities, nor shall there
be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such jurisdiction.