Elan shares rise on drug hopes

SHARES in Elan rose as much as 7% yesterday after the drug company said its treatment for Crohn’s disease could be on the market sooner than expected.

Elan and Biogen Idec, the American firm co-developing the treatment for the painful, disease, said they would ask the European Medicines Agency (EMA) to approve the release of Antegren.

The company said it was enthused by the results of Phase 3 trials of the treatment. It had tested some patients with Antegren and others with a placebo and found that its drug had worked. As a result it was filing an application with the EMA to have the drug approved for the market.

Crohn’s disease causes a range of painful symptoms and Elan said the treatments currently available provide only limited relief.

Elan saw its shares move up by 7% on the Dublin stock exchange to just over €20, but eased back in late trading to end the day 4% ahead. The shares have rocketed in the past year, having slumped by more than 90% in 2002.

The move will be a major boost for Elan, which has sold many of its existing products to raise money to pay off its debt pile.

Goodbody Stockbroker noted yesterday that while the European market for a drug for Crohn’s disease is smaller, around $100 million compared to $700m in the US, the outlook is very positive for the company.

NCB said the new drug could be approved early in 2005, a year ahead of its forecast.

Earlier this year, Elan and Biogen said they planned to submit Antegren for US Food and Drug Administration approval by mid-year for treating multiple sclerosis. It said that data from the first year of two 24-month study was strong enough to file for FDA approval.

Separately yesterday, Elan and pharmaceutical firm Vernalis closed an agreement to terminate their development and license pacts to the drug Frova. Vernalis will pay Elan $55m for North American rights to Frova, a prescription medicine for migraines.

Frova boosted Elan’s total revenue for 2003 by $37.5 million to $1.13 billion and added $8.1 million to the company’s gross profit. The carrying value of Frova intangible assets is about $23 million, according to Elan’s accounts.

Elan has had a positive start to life under new management and the launch of a successful drug would be a major coup for the Athlone-based company as the accounting scandal that saw its shares plummet still hangs over the company.

The probe into its accounting policies by the US financial markets regulator, the SEC, has still not been concluded despite two years of investigating.