Elan positive despite losses of $43m

IRISH pharmaceutical group Elan has kept its positive full-year guidance unchanged, despite posting a third-quarter net loss of $43.6 million (€31.6m).

The figure — for the three months to the end of September — compared to a net profit of $52.3m for the same period last year. In reality, however, both years’ third-quarter figures were heavily skewed by 2009’s profit from a one-off $107.7m gain related to Johnson & Johnson’s investment in the company, and 2010’s loss from the $206m court settlement costs relating to the marketing of one of Elan’s previous drugs, Zonegran.

Largely because of that, and the continuing growth surrounding its headline multiple sclerosis drug, Tysabri — which saw quarterly revenues rise by 18%, year-on-year — Elan has maintained its line that it is on course to achieve full-year 2010 EBITDA (earnings before interest, tax, depreciation and amortisation) of more than $150m and higher revenue than in 2009, when an 11% rise to $1.1bn was achieved. The company is also maintaining that it will be profitable — on a net profit basis — by the end of this year.

“We’re very pleased with the outcome of this quarter, which reflects continued improvements in our operating performance and our capital structure.

“We also made further progress in improving our balance sheet this quarter, repaying debt that was due in 2011 and 2013 and issuing a 2016 bond,” commented Elan’s chief financial officer, Shane Cooke, yesterday.

Yesterday’s results also showed a third quarter revenue of $281m, which was down by 2% on the same period last year and a pre-tax loss of $37.6m.

Meanwhile, on a management basis, Mr Cooke said that the recent boardroom unrest at Elan — which ultimately saw the resignation of two ‘dissident’ directors — has been fully resolved.

He added that a formal announcement on a new group chairman, to replace Kyran McLaughlin who is set to retire from the board, could be expected before the end of the year.

In addition, Elan said that its long-term plans to spin-off its Athlone-based drug delivery business, EDT — ideally, by floating it on one or two stock exchanges as a separate entity — remain mothballed, due to overall weak market conditions; but added that its main in-test Alzheimer’s treatment, ELND005, is set to progress from Phase 2 trials to Phase 3 testing shortly.

Elan’s Dublin-based share price fell by just under 2%, or 8c, yesterday, to close the day at €3.97.