Elan ‘expects profit’ next year

MANAGEMENT at Irish pharmaceutical company Elan has re-iterated to shareholders that the |firm should be profitable by the end of next year, adding that the business had effectively turned the corner.

At the company’s annual general meeting in Dublin, Elan chairman Kyran McLaughlin said the board was “very optimistic that the company was at the turning point now” and expressed hope in its share price recovering in value.

Elan’s share price has dropped by nearly €20 in the last 12 months and is hovering around the €5 mark in Dublin. While Mr McLaughlin said, yesterday, the board was surprised the company’s share price didn’t rise more on the back of the recent announcement of its strategic link-up with US healthcare giant, Johnson & Johnson, he added that last year’s share price highs had “run ahead” of events and were progressing at an unrealistic pace compared with the real pace of progress of the company’s actual operations.

Earlier this month, Elan’s six-month strategic review came to a close with it formally announcing that Johnson & Johnson had invested $1.5 billion (about €1.06bn) in acquiring an 18.4% equity stake in the Irish firm and a 50.1% interest in Elan’s Alzheimer’s pipeline of treatments, currently at various test stages.

Part of that received money will go on reducing Elan’s debt levels, but also possibly on a number of small bolt-on acquisitions.

Speaking after yesterday’s AGM, Elan chief executive Kelly Martin said there are a number of small companies with promising pipelines in need of investment and Elan would look at logical opportunities that would complement the company’s current operations.

Mr Martin also re-iterated that Elan currently has no plans to sell its drug delivery arm, EDT (“it’s a very good business and we would like to grow it,” he said) and will be figuring out how best to invest in its growth opportunities.

Elan’s total workforce across its Irish and US operations are down to 1,500 currently, but no further job cuts are expected. Mr Martin said “selective” additions to staff numbers could be made in due course. “We’re about as small as we can get for the amount of business we want to do,” he added.

Elan issues second quarter results next Tuesday. It said yesterday that users of Tysabri grew by around 260 per week during the quarter. Currently around 43,400 people use the drug on a global basis.

Tysabri’s co-owner, Biogen Idec, yesterday reported a year-on-year fall in second quarter net profit from $206.6m to $143m.