Elan eyes first profit in nine years

ELAN expects to show a full-year operating profit for the first time in nearly a decade this year, after reporting a 56% fall in annual losses for 2009.

The last time Elan reported an operating profit was in 2001. The Dublin and Athlone-based pharmaceutical company — which co-owns the MS treatment Tysabri — yesterday reported a net pre-tax loss of $129.8 million (€94.7m) for 2009, down from a loss of $297.3m in the previous year. However, the fourth quarter of last year saw the company make a quarterly operating profit of $35m.

Adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) amounted to $96.3m for the full year, which was up from the $4.3m reported in 2008 and ahead of the $75m previously guided by management.

Overall company revenue, for 2009, came in at $1.1bn — marking an 11% improvement on 2008 levels. The revenue growth was mainly driven by a 30% year-on-year rise in sales of the aforementioned Tysabri.

Full-year revenue for Elan’s biopharmaceuticals division, which includes the Tysabri treatment, rose by 20% to $837.1m and Elan’s fourth quarter pre-tax losses were lessened by 11% to $57.3m. However, full year revenue at its Athlone-based drug delivery subsidiary, Elan Drug Technologies (EDT) fell by 9% to just under $276m. The company said this wouldn’t result in further cost-cutting measures at the business.

“For 2010, we expect to report operating profits — before other charges or gains — for the first time in several years, driven by our continued growth in revenue and reduced operating expenses,” said chief financial officer Shane Cooke.

Chief executive Kelly Martin said Elan had successfully managed to evolve — thanks to it selling a strategic interest in the company to Johnson & Johnson in 2009 — in the face of the overall biotechnology industry changing significantly.

“In 2010, we will remain focused on building out Elan’s unique mixture of science and technology, while continuing to reduce risk and infrastructure so that we produce long-term benefits for patients and provide a compelling investment thesis for shareholders,” he added.

Elan’s share price in Dublin jumped by more than 1% — or 5c — yesterday, closing at €5.19. Its successful debt refinancing also resulted in it more than halving its net debt, as of year end, to $700m.

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