Elan’s share prices continue to surge

ELAN’S share price continued to surge yesterday as the market digested news that its experimental Alzheimer’s vaccine had positive impacts on patients before it was abruptly pulled from testing after side effects emerged.

The share price was up 30% since Tuesday at the close of the Irish Stock Exchange last night.

Davy Stockbroker's analyst Jack Gorman warned that other more erratic factors, such as traders covering post the settlement of the King deal may also have been responsible for the extent of the share's price surge.

"But the fundamental issues liquidity, the SEC, and pipeline remain key to our $8-10 risk adjusted valuation over the medium term and in this regard it has been a very positive week for Elan so far," Mr Gorman added.

Mr Gorman also explained the base asset value of Elan is close to $4 per share. "The current price is now factoring in a market cap increment of circa $575m to reflect the value of the pipeline and a discount for SEC risk," he said.