Chairman Geaney quits before facing investors

DURING 14 years of hard graft with Elan Donal Geaney played a key role in transforming it from a 32-person concern into a 24.5 billion international pharmaceutical company.

Yesterday morning when he quit as chairman and chief executive of what just a year earlier was Ireland’s most valuable company, Elan was valued at just 858 million, a mere 3.5% of its value in June of last year. The firm announced that Mr Geaney had quit just hours before he was due to answer questions from angry investors.

Elan grew fivefold in the five years after Mr Geaney took over as chief executive in 1995, but since January it lost close to 96% of its market value.

Don Panoz, an American chemist of mixed Italian-Irish heritage, had set up Elan as a drug delivery system specialist in 1969. Mr Geaney, a 51-year-old Dubliner joined Elan in 1987. At the time it employed 22 people in Ireland and 10 in the United States.

Over the next decade he helped guide the company, which floated in 1989, through a series of acquisitions and partnerships which spurred its rapid growth. He was appointed chief executive in 1995 and became chairman in 1997 when Panoz retired.

Under Mr Geaney and executive vice-chairman Thomas Lynch, another former KPMG partner who left Elan yesterday too, Elan’s revenues reached $1bn in 1999, and the company embarked on an ambitious strategy of transforming itself from a drug delivery outfit into a fully integrated pharmaceuticals firm.

Questions had been asked in the past about Elan’s accounting methods, particularly the opaque network of joint ventures it used to finance its research and development. In the wake of the Enron scandal these questions returned with a vengeance.

In February the US Securities and Exchange Commission announced it was investigating the company’s accounting. The probe, coupled with a profit warning for 2002 and serious setbacks in its Alzheimer’s research programme, sent shares into a tailspin.

As the bad news continued, with market concerns raised over the level of the its debts, Elan said it would scale back operations and Mr Geaney came under fire from dismayed investors.

Yesterday he parted company with Elan but will remain as an advisor.