Shares in Elan stage a minor recovery

ELAN shares staged a minor recovery yesterday, undoing some of the damage suffered by Thursday’s crash that cut their value in half.

The shares ended the day 30c higher at €2.70, representing a nice little gain for investors that bought on the back of news that a third patient had developed a fatal disease while taking the company’s Tysabri multiple sclerosis drug.

But trading volumes were significantly lighter, with shares worth just €6 million changing hands. This was about half the level of trading seen on Thursday, when the share price crumbled by 55%.

Goodbody Stockbrokers analysts Ian Hunter said Wednesday’s shock news had brought key questions regarding the company’s cash position into focus. The news was a serious blow to its attempts to get Tysabri back to the market, but the share price collapse heightened concerns that the company may face the prospect of repaying over $1 billion (€760 million) in debt in 2008. This may force Elan to sell some of its remaining research businesses, said Mr Hunter.

Over 400 jobs at the Elan plant in Athlone are believed to be secure in the short-term despite this week’s events. It is expected to go ahead with plans to recruit 40 more workers in Athlone in the near future.

Elan is expanding its plant in Monksland, on the outskirts of Athlone, and is expected to take on 120 workers when building work is complete.

“Elan have contacted me to say that the Athlone jobs are safe for now, and that they are continuing with their recruitment plans,” said Athlone Chamber of Commerce chief executive Siobhán Bigley.

“They have told me the expansion is still on schedule. Elan has grown in recent months in Athlone and this growth will continue.

In a separate development, Biogen Idec, Elan’s partner in developing and marketing Tysabri, yesterday withdrew its profit forecasts for the year.

Analysts said this meant the company was likely to report lower-than-expected profits.