PML research boost for Elan

CONTINUED research into a treatment for the rare brain disease PML — which is a potentially fatal side effect of the Tysabri multiple sclerosis (MS) drug — could result in a marked acceleration in revenue at Irish drug-making firm Elan.

US pharmaceutical firm, Biogen Idec — which is the joint owner of the MS drug with Elan — has already said it is looking at a treatment for PML, which has resulted in the deaths of two Tysabri users in the past four years. Any breakthrough would significantly lower the risk linked with taking the drug.

Biogen again reiterated its commitment to the drug at its research and development (R&D) day in the US last week.

Davy Stockbrokers said yesterday that any re-acceleration in Tysabri patient addition rates could have “a marked impact” on Elan’s profitability, with adjusted EBITDA (Earnings before Interest, Taxes, Depreciation and Amortisation) potentially rising to $184m (e139m) by the end of next year. That figure was between $4m and $5m for 2008.

Meanwhile, Elan’s latest annual report, published yesterday, showed the remuneration packages for the firm’s senior management shrunk significantly last year. In addition, company chief executive Kelly Martin waived his annual bonus. Elan’s share price fell by 73% over the course of 2008.

Mr Martin’s total remuneration package amounted to $830,496 (e626,989) — of which $806,154 related to basic salary. His total package in 2007 amounted to $1.96m.

Just over a month ago, Elan announced it will be cutting 230 jobs from its global workforce — 115 to come from its Irish operations — to reduce costs.

On a strong day’s trading in Dublin yesterday — which saw the ISEQ rise by over 3% — Elan’s share price gained 38c — or nearly 8% — to €5.28.