Elan Corporation offers to purchase Senior Fixed Rate Notes due 2013

Aug 31 2010

Elan Corporation, plc ("Elan") (NYSE: ELN) announced today that Elan's wholly-owned subsidiaries, Elan Finance public limited company ("Elan Finance") and Elan Finance Corp. ("Elan Corp" and together with Elan Finance, the "Issuers"), commenced an offer to purchase of up to $186,000,000 aggregate principal amount of their 8 7/8% Senior Fixed Rate Notes due 2013 (the "2013 Fixed Rate Notes") and their Floating Rate Notes Due 2013 (the "2013 Floating Rate Notes" together with the 2013 Fixed Rate Notes, the "2013 Notes"), in accordance with the terms of the indenture governing the 2013 Notes, at a purchase price of 100% of the principal amount thereof, plus accrued and unpaid interest to the date of payment. The offer will expire at 11:59 p.m., New York City time, on September 29, 2010, unless extended, and is expected to close on September 30, 2010.

On September 17, 2009, JANSSEN Alzheimer Immunotherapy ("Janssen AI"), a newly formed subsidiary of Johnson & Johnson, completed the acquisition of substantially all of the assets and rights of Elan related to its Alzheimer's Immunotherapy Program ("AIP"). In addition, Johnson & Johnson, through its affiliate, Janssen Pharmaceutical, invested $885.0 million in exchange for newly issued American Depositary Receipts of Elan, representing 18.4% of Elan's outstanding ordinary shares (the foregoing transactions are referred to as the "Johnson & Johnson Transaction"). Johnson & Johnson also committed to fund the further development and commercialization of the AIP in an amount equal to $500.0 million. In consideration for the transfer of these rights and assets, Elan received a 49.9% equity interest in Janssen AI. Elan is entitled to a 49.9% share of the profits of Janssen AI and certain royalty payments upon the commercialization of products under the collaboration with Pfizer (which acquired our collaborator, Wyeth).

The Johnson & Johnson Transaction constituted an "asset sale" pursuant to the indenture governing the 2013 Notes. The indenture governing the 2013 Notes requires Elan, upon the sale of certain assets, to reinvest the net proceeds from such sale in assets useful to its business or property, in assets to replace the property or in assets that are sold or to make capital expenditures that are useful to Elan and its business within one year of the receipt of sale proceeds or to use such proceeds to repay debt that is pari passu with the 2013 Notes. To the extent that the Issuers do not apply the proceeds as outlined in the indenture governing the 2013 Notes, the Issuers must make an offer to purchase the 2013 Notes at 100% of the principal amount of the 2013 Notes plus accrued and unpaid interest to the date of redemption.