Elan upgrades earnings outlook

ELAN is anticipating its full-year earnings for 2011 will beat its previous $200 million (€138m) guidance.

The upgraded outlook follows on from a better than expected first quarter performance from the Dublin and Athlone-based pharmaceutical firm. During the first three months of this year, the company saw its net income rise to $68.2m — up from a first quarter net loss of $7m last year. Overall revenue was up by 1% year-on-year — from $311m to $313m.

The good quarterly showing was mainly driven by a 23% year-on-year sales rise for Tysabri; the multiple sclerosis (MS) treatment which Elan co-owns with US pharma, Biogen Idec.

Management said Tysabri’s performance, combined with “disciplined expense management”, has created “meaningful operating leverage for the company”.

Chief financial officer Shane Cooke added: “The outlook for the remainder of the year remains positive and we’re re-confirming our full-year guidance to be cash positive, and now expect adjusted Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) to exceed $200m, driven by accelerating revenue growth.”

Revenue from Tysabri — which is used by over 58,000 worldwide — came in at $245.2m for the quarter and expectation for further growth is strong.

Elan said it is confident of significantly increasing its share of the MS market and broadening its customer base within that sector, over the next few years, on the back of the soon-to-be-available test programme for patients to see if they have the so-called JC virus; the main cause of PML — the rare, and potentially fatal, brain disease which is a potential side-effect of Tysabri. The assay — already available on a limited basis, but set to be widely available by mid-summer — should give a much clearer indication of Tysabri’s safety.

On the back of that, Elan hopes to double Tysabri’s market share — currently around 10% — over time.

Meanwhile, Elan’s Athlone-headquartered drug delivery business, EDT — which was set for either a separate public flotation or even a trade sale last year — produced revenues of $65.9m for the first quarter; down from $76.4m for the corresponding period last year. Until equity markets pick up further, EDT will not be floated, but Elan’s management didn’t rule out a trade sale.

Chief executive, Kelly Martin noted, however, that EDT still has a part to play in Elan’s growth. Despite the first quarter results being marginally ahead of market forecasts, Elan’s share price dipped by just over 1% yesterday, to €5.72.