Elan shareholders given a boost

IT was like the good old days for Elan shareholders, with a €1.4 billion rise in the value of the company’s stock in the last two days.

In the old days, a significant move in Elan had a major bearing on the ISEQ.

The index was up 1.52% yesterday, another beneficiary of Elan’s 54% price rise in the last two days. Elan’s share price closed at €10.65, up from Tuesday’s opening price of €6.90. Back in June 2001, Elan was the most valuable company traded on the Irish Stock Exchange, with a market capitalisation of more that €23 billion.

A Wall Street Journal article in January, 2002 questioning Elan’s accounting procedures, in particular the treatment of proceeds from product divestures and the treatment of joint ventures, heralded a significant fall in an already weakened share price.

Elan refuted the allegations but the share price plummeted. The value of the company fell to well below e1 billion, less that its gain on Wednesday and yesterday, and the one-time giant had to play second fiddle to rival pharmaceutical Galen in the market valuation rankings.

In the US, a follow-up Securities and Exchange Commission investigation into the company remains unresolved.

Then, great news on Tuesday pushed up the share price to a 20-month high by yesterday.

Elan is to fast-track Antegren, its much-vaunted experimental treatment for multiple sclerosis (MS).

In an interview on Wednesday, Elan chief executive Kelly Martin said that, if it was approved by the Food and Drug Administration in the US, the drug could be on the market in the first quarter of next year.

This would open the door to sales in the billions, estimated by NCB stockbrokers to be worth $1.7bn at peak in a single year.

Elan’s news surprised the market on Wednesday when it said it was filing for regulatory approval of Antegren as a treatment a year ahead of schedule.

“A lot of people had written Elan off as a fallen angel, with the result that now there are a lot of funds that are very underweight in the stock,” one dealer said.

Elan has undergone a massive recovery programme during which it raised $2 billion by selling off assets and cutting costs, easing fears about its liquidity, while analysts say Antegren would be a strong contender in an MS drug market worth up to $4billion.