UPDATE: Royalty Pharma Confirms Increased $12.50/Share Cash Bid for Elan

Echo Pharma Acquisition Limited ("Royalty Pharma") today announced, pursuant to Rule 2.5 of the Irish Takeover Rules (the "Announcement"), a firm intention to increase its offer for Elan Corporation, plc

to $12.50 per share in cash.  The increased offer is fully financed, cash confirmed and not conditional on due diligence.  The $1.00 per share net cash right has been eliminated.  Royalty Pharma has reserved the right to waive down the Acceptance Threshold for the increased offer from 90 percent to 50 percent plus one Elan Share and will update Elan Stockholders in this regard in the Revised Offer Document.  Royalty Pharma is offering a compelling value of $4.6 billion for Elan's Tysabri Royalty, a 42 percent premium to the $3.25 billion at which Elan sold approximately half of its interest in Tysabri to Biogen.  The increased offer also represents a premium of 45 percent to the Undisturbed Elan Enterprise Value.  Royalty Pharma believes that Elan dramatically overpaid in the Theravance Transaction by agreeing to pay $1 billion for 21 percent of selected royalties owned by Theravance when all of Theravance was trading at $3.5 billion.  Royalty Pharma is assessing the transactions announced today.  The increased offer is therefore conditional on Elan Stockholders voting against the Theravance Transaction and all transactions announced today that are put to a shareholder vote. Key Observations Regarding the Elan / Theravance Transaction o The Theravance Transaction public disclosure suggests that the transaction was pursued in haste and without critical confidential information which could significantly impair the value of the asset o Royalty Pharma expects that the same may be true of the transactions announced today o Despite this apparent lack of information, the Elan Board has agreed to recommend the Theravance Transaction to Elan Stockholders with no "fiduciary out" to change its recommendation: o The Elan Board has compromised its ability to freely advise Elan Stockholders regarding Royalty Pharma's offer and the Theravance Transaction, thereby making itself irrelevant to stockholders' decisions on these matters o The Elan Board cannot recommend Royalty Pharma's offer – at any price – without breaching the Theravance Agreement o The Elan Board must recommend the Theravance Transaction even if the value of what it has agreed to buy is impacted by material adverse changes o Royalty Pharma believes it is highly irresponsible and "off-market" to agree to such provisions o If the Theravance Transaction and the transactions announced today serve as examples, Royalty Pharma believes stockholders should be very concerned about future value destruction and undue risk-taking by Elan At a time when Elan Stockholders are evaluating Royalty Pharma's offer, the Elan directors have failed to maintain an appropriate balance between supporting management's acquisition plan and their fiduciary responsibilities in respect of Royalty Pharma's offer. The Elan Board should have retained all options to maximize shareholder value