Elan drug approved as company narrows losses

THE European Commission has given Elan marketing approval for its drug Prialt, a painkiller derived from a tropical sea snail.

The Irish pharmaceutical company, which saw its share price collapse three years ago due to accounting worries in the group, said yesterday: "Prialt can offer new hope for patients in Europe as the first new IT analgesic approved in more than two decades."

An infusion treatment for severe chronic pain, Prialt achieved US regulatory approval last December.

Prialt targets patients who do not respond to traditional painkillers.

Although industry analysts see only modest worldwide sales, endorsement of the drug is important for sentiment.

The company is relying on new products to revive its fortunes.

In early February, fourth quarter results for 2004 showed a sharp decline in losses and a forecast that the group would return to profit in 2006.

Despite the lack of a solid stream of new drugs the group has left the accounts disaster well behind.

Its share price hit a high of $65 in 2001 before the Security and Exchange Commission came after the group over its accounting policies and it fell to a low of $1.05 the following year.

Elan yesterday reported a narrowing of its losses for the final quarter of the year.

Losses for the three months ending December 31 came to $79m, down from $187m the same time the previous year.

Revenue from retained products and contract manufacturing and royalties of $91.8m in the fourth quarter increased by 29% on the $70.9m the same time in 2003. Revenue from sales of MS drug Tysabri amounted to $6.4m in the fourth quarter, Elan added.

"2004 was an extraordinary year for Elan, with two Elan innovations Tysabri for multiple sclerosis and Prialt for severe chronic pain approved in the US, with both therapies advancing in the regulatory process in Europe," said president and CEO Kelly Martin.

Elan shares closed down 49c at €21.55 in Dublin.