Elan US probe to end in six weeks

THE drug company, Elan, expects the American financial regulator to conclude its investigation into its accounts in the next six weeks.

The Securities & Exchange Commission (SEC) have been looking at Elan’s accounting policies since February, 2002, and are expected to end their inquiry next month and finalise the outcome with Elan later this year.

Chief executive Kelly Martin said the SEC inquiry, which centres on the use of off balance sheet vehicles and how they were treated in Elan’s accounts, and civil lawsuits taken by some shareholders were now the only overhang on the company.

Mr Martin said he did not know what the outcome of the SEC would be, but would appeal if they were adverse for Elan.

“There has been more than two years of correspondence and discussions between the company and the SEC. We don’t know what the final and ultimate conclusions are yet,” he said, adding that it has not set aside any provisions if the company was fined.

After the company’s annual general meeting yesterday, Mr Martin said he believed that the worst of the troubles were behind Elan and it could concentrate on rebuilding the business.

The company was very optimistic for the prospects for its Antegren treatment and has lodged filings with drug regulators in Europe and the US to have this on the market to treat Crohn’s disease and Multiple Sclerosis.

Elan are also carrying out studies on developing a treatment for mild to moderate Alzheimer’s disease.

Since the crisis in Elan in 2002, the company has sold off $2.6 billion worth of assets, most of which went to pay off debt holders. Mr Martin said the company has $1 billion in cash and would look at issuing new bonds later this year to raise more money.

The company will have to pay $490m to holders of its debt in September and $340m next February.

Meanwhile, Dr Garo Armen is set to step down as chairman of the company. He gave no timetable for his departure, but said the nominations committee of the board would meet to find a new chairman.

Dr Armen is widely credited, along with Mr Martin, with turning around the fortunes of what was once Ireland’s biggest company.

The company also confirmed that former bosses Donal Geaney and Tom Lynch will no longer have any role at Elan after July. The pair, who were paid $2m between them last year, have been acting as consultants since being ousted.