Hopeful signs for Elan

ATHLONE-BASED pharmaceutical company Elan has been assigned a hold recommendation

Analyst Ronan Wallace said prices agreed for disposals to date have generally been in excess of what would have been expected.

"Allied to good prices has been positive comments from the company's Chairman that Elan should reach its target ahead of schedule and that proceeds are likely to exceed original estimates. While this bodes well for achieving its short-to-medium term goals, there still remains significant risk associated with the stock," he said.

Clearly, he added the Securities and Exchange Commission (SEC) investigation outcome into accounting practices was of huge importance and, as such, his recommendation remains unchanged until the SEC findings are made available.

Elan will realise $82 million in cash after giving effect to certain contractual payments and payments to other stockholders of Athena.

Athena Diagnostics provides esoteric testing services in the areas of neurogenetic diagnostics; peripheral neuropathy diagnostics; and, Alzheimer's disease diagnostics.

For the first nine-months of 2002, Elan recorded net revenue and operating profit for Athena Diagnostics of $31.2m and $9.7m, respectively. As at September 30, the carrying value of Elan's remaining stockholding in the Athena Diagnostics business amounted to $26.0m.

Elan have also completed the sale of its rights to Abelcet (antifungal treatment) in the US, Canada and Japan to Enzon, Inc.