SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the period dated as of June, 1996
Elan Corporation, plc
(Translation of registrant's name into English)
Monksland, Athlone, County Westmeath, Ireland
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will
file annual reports under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
--- ---
Indicate by check mark whether the registrant by furnishing
the information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g-2(b) under the Securities
Exchange Act of 1934.
Yes No X
--- ---
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UNAUDITED PRO FORMA
COMBINED FINANCIAL INFORMATION
The following unaudited pro forma combined financial
information (the "Pro Forma Combined Financial Information") is based on the
historical financial statements of Elan Corporation, plc ("Elan") and Athena
Neurosciences, Inc. ("Athena") and has been prepared to illustrate the effects
of the merger (the "Merger") of Athena with a wholly-owned subsidiary of Elan.
The Pro Forma Combined Financial Information and accompanying notes should be
read in conjunction with the historical financial statements of Elan and Athena.
The pro forma combined statements of income for the year ended December 31, 1995
give effect to the Merger as if it had occurred on January 1, 1995. The
historical statement of operations of Athena, which is prepared in U.S. dollars,
has been converted into Irish pounds at the average rate during calendar 1995
between $ and IR(pound), as calculated by the Central Bank of Ireland at
$1.6039. The pro forma combined balance sheet as of December 31, 1995 has been
prepared as if the Merger had occurred on that date. The historical balance
sheet of Athena, as of December 31, 1995, which is prepared in U.S. dollars, is
converted at an Irish pound rate of $1.60, the Noon Buying Rate on December 31,
1995. The Pro Forma Combined Financial Information has been prepared in
accordance with U.S. GAAP using the purchase method of accounting. The Pro Forma
Combined Financial Information does not contain any adjustment to reflect any
restatement of the net assets of Athena to conform with Elan's accounting
policies or the costs, benefits or synergies resulting from the integration of
Elan and Athena following the Merger. The Pro Forma Combined Financial
Information is not necessarily indicative of any future results of operations or
the results that might have occurred if the Merger had been consummated on the
indicated dates.
The Merger will be accounted for using the purchase method of
accounting. The total purchase cost of the Merger will be allocated to tangible
and intangible assets and liabilities acquired based upon the reflected fair
market values. Any allocation relating to in process research and development
will be written off at the time of the Merger. The allocation of the aggregate
purchase price reflected in the Pro Forma Combined Financial Information is
preliminary. The final allocation of the purchase price is contingent upon final
appraisals of the acquired assets.
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<TABLE>
<CAPTION>
Unaudited
Pro Forma Combined Balance Sheet
(in thousands)
At December 31, 1995
Historical Combined
--------------------- ---------------------------
Elan Athena(i) Adjustment Note Pro Forma Pro Forma(i)
---- --------- ---------- ---- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents.... IR(pound)121,135 IR(pound)25,180 IR(pound)(10,000) 2 IR(pound)136,315 $218,104
Marketable investment
securities............... 86,861 3,751 -- 90,612 144,979
Accounts receivable and
prepayments................ 30,328 4,044 -- 34,372 54,996
Inventories.................. 15,939 1,216 -- 17,155 27,447
------------- ------------ ------------ ------------ ------------
Total current assets........ 254,263 34,191 (10,000) 278,454 445,526
----------- ------------ ------------ ------------ ------------
Fixed assets:
Property, plant and
equipment (net).......... 57,219 2,934 -- 60,153 96,245
Other assets:
Investments.................. 43,613 -- (7,500) 1 36,113 57,781
Intangible assets (net)...... 49,599 17,984 47,875 2 115,458 184,733
----------- ------------ ------------ ------------ ------------
150,431 20,918 40,375 211,724
----------- ------------ ------------ ------------ ------------
338,759
Total assets................... IR(pound)404,694 IR(pound)55,109 IR(pound)30,375 IR(pound)490,178 $784,285
================= =============== =============== ================ ============
Liabilities and shareholders
equity
Current liabilities:
Accounts payable and
accrued liabilities........ IR(pound)16,411 IR(pound)5,696 IR(pound)-- IR(pound)22,107 $35,372
Current portion of debt...... -- 1,160 -- 1,160 1,856
----------- ------------ ------------ ------------ ------------
Total current liabilities.. 16,411 6,856 -- 23,267 37,228
- ---- ----------- ------------ ------------ ------------ ------------
Government grants.............. 1,896 -- -- 1,896 3,034
Long-term debt................. 103,968 11,968 (7,500) 1 108,436 173,497
Minority interests............. 388 -- -- 388 621
----------- ------------ ------------ ------------ ------------
106,252 11,968 (7,500) 110,720 177,152
----------- ------------ ------------ ------------ ------------
Share capital.................. 1,503 172 323 2 1,826 2,922
(172)
Additional paid-in capital..... 214,726 107,618 364,828 2 579,554 927,286
(107,618)
Equity adjustments from
foreign currency translation. (7,486) -- -- (7,486) (11,978)
Retained earnings.............. 73,288 (71,505) (290,991) 2 (217,703) (348,325)
71,505
Shareholder's equity......... 282,031 36,285 37,875 356,191 569,905
---------- ----------- --------- --------- ---------
Total liabilities and
shareholders' equity........ IR(pound)404,694 IR(pound)55,109 IR(pound)30,375 IR(pound)490,178 $784,285
================= =============== =============== ================ ===========
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(i) Translated for convenience at the Noon Buying Rate on December 31, 1995 of $1.60 = IR(pound)1.00.
</TABLE>
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Notes to Unaudited Pro Forma
Combined Balance Sheet
1. Reflects the elimination of a $12 million 10% convertible subordinated loan
(IR(pound)7,500,000), advanced by Elan to Athena in March 1995.
2. The Merger is expected to result in the issuance of 8,087,438 Elan Ordinary
Shares, par value 4 Irish pence per share, resulting in an increase in
share capital and additional paid-in capital of IR(pound)323,000 and
IR(pound)364,828,000, respectively. In addition, Athena has options,
warrants and convertible debt which are expected to be exercisable for, or
convertible into 5,583,615 shares of Athena common stock, par value $.01
per share ("Athena Shares"), excluding any such instruments held by Elan.
Under the Agreement and Plan of Merger dated March 18, 1996 (the "Merger
Agreement") the holders of the options, warrants and convertible debt of
Athena, will receive similar rights in Elan, adjusting the number of shares
to which these instruments are entitled and the exercise/conversion price
for the exchange ratio .2956 (the "Exchange Ratio") Elan American
Depositary Shares ("ADSs"). The amount by which the quoted market value of
the Elan ADSs exceeds the exercise price is included in additional paid-in
capital and included in the purchase price. The share price used for the
purpose of this calculation is that of the close of business on April 12,
1996 ($64.25). This was converted into Irish Pounds at the rate of $1.60
equals IR(pound)1.00, the noon buying rate in New York City on December 31,
1995. The total resulting purchase price approximates IR(pound)375,151,000
including transaction expenses of IR(pound)10,000,000. The purchase price
is allocated as follows:
Increase in fair value of intangible assets..... IR(pound)47,875,000(a)
In-process research and development............. 290,991,000(b)
Net assets of Athena per balance sheet at
December 31, 1995............................. 36,285,000
------------
375,151,000
============
- ------------------------
(a) Reflects an increase in the carrying value of intangible assets to
their estimated fair value.
(b) Reflects a one-time charge against earnings, representing the
acquisition of in-process research and development activities
estimated at IR(pound)290,991,000. This charge is excluded from the
unaudited pro forma combined income statement as it is non-recurring.
3. In certain circumstances Elan may use the resulting cash and cash
equivalents to acquire Elan ADSs in the open market subsequent to the
consummation of the Merger.
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Unaudited
Pro Forma Statements of Income
(in thousands, except per share data)
<TABLE>
<CAPTION>
Year Ended December 31, 1995
-----------------------------
Historical Combined
------------ ---------
Pro Pro
Elan Athena(i) Adjustment Note Forma(ii) Forma(ii)(iii)
---- -------- ---------- ---- --------- --------------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Product sales and service
revenues..................IR(pound)53,950 IR(pound)27,187 IR(pound)-- IR(pound)81,137 $129,819
Research revenue............ 19,208 6,119 -- 25,327 40,523
Royalties and fees.......... 51,161 -- (2,031) 1 49,130 78,608
----------- ----------- -------- --------- -------
Total revenues...... 124,319 33,306 (2,031) 155,594 248,950
----------- ----------- -------- --------- ------
Cost and expenses:
Cost of goods and services
sold...................... 41,481 13,086 3,436 2 58,003 92,804
Selling, general and
administrative............ 20,815 13,840 -- 34,655 55,448
Research and development.... 18,193 24,703 (2,031) 1 40,865 65,383
---------- ----------- --------- --------- --------
Total operating
expenses.......... 80,489 51,629 1,405 133,523 213,635
---------- ----------- --------- ------- --------
Operating income.............. 43,830 (18,323) (3,436) 22,071 35,315
Interest and other income... 12,144 1,010 (563) 1 12,591 20,145
Interest expense............ (5,733) (1,236) 563 1 (6,406) (10,249)
Share of losses of
associates................ (754) -- -- (754) (1,206)
Minority interest........... 60 -- -- 60 96
----------- ------------ --------- ---------- ---------
Income (Loss) before tax...... 49,547 (18,549) (3,436) 27,562 44,101
Taxation...................... (277) -- -- (277) (444)
----------- ------------ ---------- ---------- ---------
Net Income (Loss).............IR(pound)49,270 IR(pound)(18,549) IR(pound)(3,436) IR(pound)27,285 $ 43,657
=============== ================ =============== =============== ========
Earnings per ordinary,
common and equivalent
share..................... IR(pound)1,36 IR(pound)(0.75) IR(pound)0.60 $0.97
================ =============== =============== ========
Weighted average number
of ordinary, common
and equivalent shares
outstanding................. 36,223 24,569 8,986 45,209 45,209
========== =========== ========= ========= ========
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(i) Translated into IR(pound) at the average rate during calendar 1995 at the rate of IR(pound)1.00=$1.6039.
(ii) As a result of the acquisition, Elan will incur a one-time charge against earnings representing the
acquisition of in-process research and development estimated at
IR(pound)290,991,000. This charge is excluded from the pro forma
Combined Income Statement as it is a non-recurring item.
(iii) Translated for convenience at the Noon Buying Rate on December 31, 1995 of $1.60=IR(pound)1.00.
</TABLE>
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Notes to Unaudited Pro Forma
Statements of Income
1. Reflects the research transactions between Elan and Athena in the year
ended December 31, 1995 and interest charged by Elan to Athena pursuant
to a US$12 million 10% convertible subordinated loan advanced in March
1995.
2. Reflects the effect of increased amortization following the revaluation
of Athena assets at their estimated fair value. The intangible assets
will be amortized on a straight line basis over their expected useful
lives, estimated at 15 years.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
ELAN CORPORATION, PLC
By: /s/ William F. Daniel
-------------------------
William F. Daniel
Group Financial Controller
Date: June 19, 1996
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