* Royalty Pharma to meet with Elan shareholder J&J
* Royalty Pharma first approached Elan last year
(Adds Elan statement, Fidelity declining to comment)
By Caroline Humer and Jessica Toonkel March 6 (Reuters) - U.S. investment firm Royalty Pharma
on Wednesday stood by its offer to acquire Irish drugmaker Elan , which has rejected the approach, and said it was ready to move quickly and could complete due diligence within 20 days.
The firm is scheduling meetings with 10 to 15 of Elan's largest shareholders, including Johnson & Johnson , as well as a few smaller investors, over the next several days, Pablo Legorreta, chief executive of Royalty Pharma, told Reuters.
"We are very confident that our offer gives Elan shareholders a very attractive alternative," Legorreta said. "We really need access to the books to do due diligence."
Royalty Pharma made a $6.6 billion approach last week after Elan announced last month a $3.2 billion plan to sell its 50 percent stake in multiple sclerosis drug Tysabri to its U.S. partner, Biogen Idec .
Elan rejected Royalty Pharma and on Monday sweetened its offer to its shareholders, saying it would give them 20 percent of future royalties from Tysabri. It had already planned to return $1 billion to shareholders after the drug sale.
"The 'proposal' by Royalty Pharma remains an indication of interest, is highly conditional, and may or may not lead to an offer being made for the entire issued share capital of the company," Elan said in a written statement on Wednesday. "The highly conditional indication of interest is opportunistic in its timing."
Despite Elan's rejection, Royalty criticized Elan for not taking its bid to Elan shareholders. It also criticized Elan's sweetened offer to shareholders.
Given the competitive M&A landscape in the sector, Elan's lack of experience in making acquisitions, and the fact that without existing products there are no synergies for Elan to realize through acquisitions, Royalty Pharma believes Elan will have a tough time growing on its own, Legorreta said.
"There are companies that have been doing this for a longer period of time," he said. "When you look at what is required to be successful in that kind of strategy, having an infrastructure, having product and having a sales force is important, and Elan lacks that."
Royalty Pharma is confident that shareholders, some which have reached out to the company, will be in favor of its proposal.
Legorreta declined to say if J&J, which owns 18 percent of Elan, is in favor of the deal or to identify the other Elan shareholders meeting with Royalty Pharma.
Fidelity Management & Research is the second-biggest shareholder in Elan, with 13.79 percent, according to Thomson Reuters. Invesco Asset Management is the third-largest with 8.7 percent.
J&J, Fidelity and Invesco declined to comment.
Royalty Pharma has been talking to Elan about a possible deal since last fall, Legorreta said.
Royalty Pharma questioned whether Elan would have any value at all after the Biogen deal is completed. It also said that as the world's largest buyer of pharmaceutical royalty revenue streams, Royalty Pharma may be the only buyer for Elan.
Earlier this week, Elan Chief Executive Kelly Martin told Reuters that his company did not view Royalty Pharma's offer as credible and said the majority of its investors did not believe the bid was worthy of a discussion period. He also said he expects the Tysabri deal to close in a month or two.
Elan shares were up 1 cent at $11.88 in early trading on the New York Stock Exchange.
(Reporting By Caroline Humer; Additional reporting by Padraic Halpin in Dublin; Editing by Maureen Bavdek and John Wallace)
((caroline.humer@thomsonreuters.com)(+1 646 223 6181)(Reuters Messaging: caroline.humer.reuters.com@reuters.net))
Keywords: ROYALTYPHARMA ELAN/
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