Elan aiming to double its revenue

ELAN is aiming to double its revenues to about $2.5 billion (€1.78bn) and the number of patients using its multiple sclerosis treatment Tysabri over the next five years.

Speaking yesterday at the publication of the Irish biotechnology company’s third-quarter results, chief financial officer Nigel Clerkin reaffirmed the group’s guidance for 2011 of EBITDA of over $200m and revenue of over $1bn, excluding the former drug delivery arm, EDT.

He added that Elan is capable of growing revenue by around 15% per annum over the next five years and expanding its Tysabri customer base from 50,000 to 120,000 over the same timeframe.

Elan’s optimism is largely based on the estimated 350,000 MS sufferers who don’t have the JC Virus; the main instigator of the potentially deadly brain disease PML, itself a possible side effect of Tysabri usage.

Of that number, about 95% say they would use Tysabri. Of the 400,000 more who have the JC Virus, some 70% say they would still be prepared to use Tysabri to improve their quality of life.

Elan’s revenues for the three months to the end of September increased by 17% year-on-year to $328.5m.

Total revenue for the first nine months of the year, was up from $861m to $975m.

Third-quarter revenue growth was again driven by Tysabri, which grew sales by 28%.

Elan chief executive Kelly Martin said: “We’re pleased with the financial and commercial progress we’ve made this quarter. The closing of the EDT deal (the Athlone-based drug delivery arm sold to biotech company Alkermes earlier this year) in particular, is transformational for our business, specifically in our ability to address debt and focus appropriate and measured investment in our neuroscience efforts.

“Over the course of the quarter, we demonstrated both positive momentum and continued tangible results for the company and, ultimately, patients and shareholders.

“Importantly, Tysabri demand continues to grow quarter over quarter and year over year. The rapid adoption of the anti-JCV antibody assay, which helps to stratify risk for individual patients, will support the significant growth potential of Tysabri.”

Jack Gorman of Davy Stockbrokers said: “The results reiterate our fundamental view that Tysabri’s growth momentum can continue in coming years and that the associated operational leverage can move Elan solidly into profitability.”

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