Elan feels full benefit of Tysabri

The first full quarterly benefit of royalty payment arrangements regarding leading multiple sclerosis drug Tysabri helped Elan record adjusted earnings of $12.1m (€8.8m) in the three months to the end of September.

The adjusted earnings were before interest, tax, depreciation, and amortisation.

The Dublin-based biotechnology firm sold its 50% share of Tysabri to its previous partner on the product, US firm Biogen Idec, for $3.25bn, earlier this year. Elan stands to receive 12% of the drug’s global net sales for the 12 months from the beginning of last May, with that amount set to rise to 18% of sales up to $2bn (and 25% of sales higher than $2bn) from next May.

Yesterday, Elan issued its results for the third quarter — likely to be its last set of earnings as an independent company, as its $8.6bn (€6.5bn) takeover by leading US generic drug manufacturer Perrigo is pending.

The results showed a net loss of $13.8m (impacted by costs associated with the upcoming transaction) for the quarter, down from a loss of nearly $230m for the same time last year. Net income for the nine months to the end of September amounted to $2.34bn and compared to a net loss for the corresponding period last year of $290m. Elan ended the third quarter in a strong financial position, with almost $1.9bn in cash/cash equivalents and no debt.

Perrigo reached agreement to buy Elan in July. The deal still requires formal approval from the Dublin firm’s shareholders, who are due to vote at an EGM in three weeks.

Elan chief executive Kelly Martin yesterday said that the deal remains on track to be concluded by the end of this year.

Elan finance director Nigel Clerkin said the enlarged Perrigo/Elan entity has the potential to become “one of the truly great companies in this industry for many years ahead”, adding that the lack of any generic competitor to Tysabri in the foreseeable future positions the drug for a significant lifespan. Biogen Idec is due to report its own third-quarter figures — including Tysabri sales updates — on Monday.

Mr Martin said the new company will represent “a highly unique business platform” that can benefit from significant emerging trends in the global biotech sector.

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