Elan on road to recovery

THE drug company Elan said yesterday that it expects the long running investigation into its accounts by US financial watchdog, the Securities & Exchange Commission, will not be over for another few months.

Chief executive Kelly Martin told shareholders at the company’s annual general meeting in Dublin that the inquiry, which has been going on since financial questions were raised in January 2002, would probably take a few more months before the SEC announced its findings.

He said the company was hopeful of a positive outcome, but it could still not say what the findings would be. However, shareholders, who have seen the value of their investment collapse in the past couple of years, were told that the company was on the road to recovery.

“We have simplified our balance sheet and reduced our debt obligations significantly, and over the next year we will continue on this course to make Elan a less leveraged and structurally simpler company,” chairman Garo Armen said.

Elan also said that it may launch a rights issue, to raise fresh funding to pay off holders of its LYONs debts. So far this year, more than that $1.5 billion has been raised through asset disposals to pay off its debt mountain, and Martin held out the possibility of further disposals, but only if the price was right.

Having slashed its workforce by 2,300 in the past 18 months, Elan said that it is considering expanding once again.

“We hope to once again start expanding our workforce as our new product pipeline matures to commercial launch and positively impacts our profits,” Mr Armen added.

This could provide a boost to its Athlone headquarters, which employs 400 people.

The company said that three of its pipeline drugs had the potential to be blockbusters - capable of selling more than $1 billion - but further clinical and patient trials were needed.

The company’s shares were trading up on the Irish stock market yesterday by 2.2% at €4.65.

Elan also announced its interim results yesterday. For the six month period total Irish revenue was $445.5m, compared with $773.5m in the first half of 2002, a fall of 43%.

The company said the fall was due to the sale of non-core products and businesses as part of the recovery plan and the impact of generic competition on revenues from Zanaflex.