Elan share slide ‘sectoral’

SHAREHOLDERS in pharmaceutical company Elan will face a long wait for news that could reverse the 30% slide in the share price over the last month, analysts warned yesterday.

Goodbody analyst Ian Hunter said Elan shares were suffering from poor investor sentiment towards the pharmaceutical and biotechnology sector. But he said Elan’s falls were in line with the rest of the sector and the company was not being singled out for special punishment by the market.

Mr Hunter said the stock was dependent on positive newsflow to drive the price higher and that there would be little news on Elan’s drug pipeline until November.

The company is expected at that stage to release fresh data from trials of Antegren, a drug considered to have strong potential that Elan hopes to use to treat disorders such as multiple sclerosis and Crohn’s disease.

Investors will also need to wait for news on Elan’s potential treatment for Alzheimer’s disease.

Results of the current testing programme will not be delivered until mid-2005.

Mr Hunter said the main Elan news item expected between now and November would relate to the investigation by the American

Securities and Exchange Commission (SEC), which began inquiries into the company’s accounting practices over two years ago.

He said there was evidence of investors selling in recent weeks to cash in on the share’s gains since the start of the year.

Elan shareholders saw the share price treble from $6 in January, on the New York Stock Exchange, before watching the value of their investment shed 15% in the last week alone. But the price is a long way off its $65 all-time high.

NCB analyst David Marshall said Elan’s second quarter results released last month, were well received by the market but agreed that sectoral issues and limited newsflow were behind the subsequent share slide.

Dolmen Securities said other stocks offered the prospect of better returns for a lower level of risk.