Elan shares jump on reduction of losses

SHARES in Elan gained as much as 7% yesterday as the drug firm posted a sharp reduction in first quarter losses.

Athlone-base Elan said operating losses for the three months to end March had fallen from $74 million to $53.4m, while at pre-tax level the loss was down from $140m to $67m.

The company attributed the better position to the disposal of non-core businesses. The loss per share fell from 40 cents to 17 cents.

Turnover for the three months dipped from $224m in the first quarter of 2003 to $151m, again mainly due to the sale of assets under its recovery plan.

Around $133m of the total came from product sales, with the rest coming from its contracting division.

Elan shares, which have made a recovery in the past year having fallen from 74 in 2002, rose by 7% on the ISEQ, though eased back later to end the day at 17.50, a 5% rise.

Elan chief executive Kelly Martin said the second quarter would see Elan file

applications with US and European drug regulators for its Antegren multiple sclerosis treatment and Prialt severe pain drug to have the products on the market.

"We continue discussions with the US and European regulators regarding potential filings for Antegren as a treatment in Crohn's disease," he said.

"Operationally, we are preparing for the anticipated launches of Antegren and Prialt, with specific targeted investments in the specialised infrastructure and personnel required for successful product launches," Mr Martin added.

Brokers said the launch of new products was the major issue for Elan to address.

The company has raised nearly $2 billion to face down a cash crisis by selling some of its drug products.

They are looking for the company to develop a stream of new treatments over the next few years.

Mr Martin added that he believed the US Securities & Exchange Commission had completed its inquiry into Elan's accounting practices a factor that has overhung the company's share price and that talks between the two would begin soon.

Elan shares have had a good run this year and outperformed the Irish market, having . The shares started the year at just 5.46.