Elan starts to produce MS drug

ELAN has started production of Antegren, its multiple sclerosis (MS) drug, in advance of a possible launch in 2005.

Elan gave a detailed briefing to stockbroking analysts on Monday. They were told the company anticipates approval for Antegren from the US Food and Drug Administration to permit sales to start by early 2005.

Merrion's Peter Frawley said, in a note to clients, Elan's greatest concern is not the approval process but rather managing the demand and supply curve.

"At launch, the group will have capacity to meet the needs for 70,000 patients and the group is currently in pre-launch production to stockpile supplies.

"Late next year, the group plans to have IDEC's Oceanside facility up and running which will meet the demand of a further 70,000 patients. To meet the demand beyond that, the group hopes to improve the yield at its existing facilities and in tandem is looking at ways of expanding its production capacity, hence Monday's announcement of a $35m proposed investment in Elan's Athlone facility," Mr Frawley said.

Elan is still under investigation by the US Securities and Exchange Commission but this is now regarded as a side issue.

Mr Frawley said: "On the SEC, the group maintained its guidance for a resolution by Q3 2004 and interestingly, the group hopes to simultaneously resolve the class action litigation."

Davy's Jack Gorman said: "Frustratingly, the Securities and Exchange Commission process drags on, not through any fault of Elan's.

"Nothing new or different has been asked for by the agency since it completed the investigation at the end of Q1. By the end of Q3 management now hope to have it, and potentially the civil suits, resolved."

Mr Gorman said it was very much a case of looking forward rather than back.

"The newsflow momentum that we can anticipate over the rest of 2004 looks very positive and supports a trading buy opportunity for the shares," he said.

Shares in Elan fell one cent to €17.79.