Ireland's biggest drug company, Elan Corporation, plc.

Elan's Bermuda-based subsidiary, Elan Finance Corporation Ltd., has just completed a $750-million debt offering, channelling the proceeds through the bank for international investment.

Elan Corp. is a research based, drug delivery and biopharmaceutical company founded in Ireland in 1969 by former Bermuda resident Donald Panoz.

It is listed on the New York Stock Exchange and quoted in London and Dublin.

The money, obtained by Elan Finance through private placement, is to be used for long term investment purposes. But in the short term, the Bank of Bermuda is involved in its management.

Elan International Services, Ltd. president and CFO, Kevin Insley, said from his offices in Flatt's Village, "A demonstration of our commitment to Bermuda is that we've put a significant amount of the funds with the Bank of Bermuda's institutional money fund. We've used it in the past for some of the Elan companies, and it has been a very flexible and competitive product for us.

"Within our own policy guidelines, we are obviously constrained in the amount of funds we can place with any one institution. It wouldn't be prudent money management to put it all in one place. But a significant amount of money from this debt offering has been placed with the Bank of Bermuda.'' Elan Finance was incorporated in Bermuda in November purely for the purpose of raising the debt, which is guaranteed by the company. The deal, handled by Merrill Lynch, was priced December 8 and closed December 14 in New York.

The success of the financing exercise was not lost on Bermuda's Government. An interview with The Royal Gazette was interrupted by a congratulatory telephone call from Premier Jennifer Smith. Mr. Insley later explained, "The Premier heard we had closed on the offering. It was a significant amount of money and she was congratulating us on closing on the deal, and for having faith in Bermuda and using a Bermuda company to raise the funds. It's obviously very pleasant to receive a call from the Premier.'' The money was raised to build up the war chest to fund ongoing investment plans. The company did a global debt offering for $325 million in 1997. Most of those funds have been spent on a number of acquisitions.

It is not unusual for pharmaceutical companies to have a large cash balance to use for company and product acquisitions. Mr. Insley said, "Elan has grown into a $9-billion cap company with in excess of 2,000 employees around the world.'' He added, "We've been targeting various things that we may seek to buy. At the moment, we are in the market, looking to acquire pharmaceutical products that we can add to our existing product line.

"We have a fairly substantial sales force, close to 450 people, most of whom are in the US. So each time we add a product, additional marketing costs are not that great.

"In addition, we would not rule out using some of the money for further possible corporate acquisitions, for which we can issue cash, stock or a combination.

"But in the interim, we manage our funds very conservatively. As a pharmaceutical company, we need to have flexibility.'' Mr. Panoz, Elan's former chairman and CEO and still a substantial stockholder, was long known for his local community and corporate contributions.

He is also widely known for his substantial resort in Atlanta, Chateau Elan, where many Bermudians holiday and take advantage of three championship golf courses.

Elan's business units and affiliated companies are heavily involved in developing treatments for Alzheimer's disease and multiple sclerosis. For more than a quarter century, Elan has been a leader in the development and application of drug delivery technologies which are designed to increase the therapeutic value and decrease the side effects of medications, improve patient outcomes and lower health care cost.

The company first began as a facilitator for drug delivery, taking existing drugs and improving their effective absorption into the human body.

The company expanded more widely into the pharmaceutical market and in 1996, acquired Athena Neurosciences which has a large central nervous system (CNS) franchise and a very large research programme.

Elan's main therapeutic niche is now CNS research. This year Elan has acquired four more companies. On the drug delivery side, the company acquired Sano Corp., which has a transdermal research and manufacturing operation for drug delivery items that include the now widely-used nicotine patch.

The company also acquired GWC Health Inc., a sales and marketing concern that has some pain care management products, which linked in with the CNS portfolio of programmes being worked on at Athena. The acquisition this summer included a 100-person sales force.

The largest acquisition this year, however, was of Neurex Corp. for more than $800 million in stock. Elan also purchased a Pennsylvania-based specialist drug delivery company, NanoSystems LLC from Eastman Kodak Co. for about $150 million in a mostly cash, and some warrants deal.

Elan International Services, a subsidiary of Elan Corp., is involved in treasury management and corporate finance work primarily here in Bermuda.

Investments are made from the Bermuda companies.

Another company, Axogen Ltd., is affiliated with Elan, although not a direct subsidiary, and raises capital for research. And Neuralab Ltd. is also used for the raising of research funding, especially for the Alzheimer's programme.

Elan has a call option to buy back the common shares of the latter two companies at a fixed date in the future.

About a dozen Elan companies are registered here including smaller investment-related subsidiaries and joint venture arrangements.

Kevin Insley