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Elan Corporation, plc Message Board

  • rjmcbear rjmcbear Oct 27, 2005 8:33 AM Flag

    Sounds positive to me

    UPDATE 2-Drug maker Elan says net loss halved in Q3
    Thu Oct 27, 2005 04:34 AM ET
    (Adds CEO quotes, analyst comment, shares)

    By Paul Hoskins

    DUBLIN, Oct 27 (Reuters) - Ireland-based Elan (ELN.I: Quote, Profile, Research) halved its losses in the third quarter after a 40 percent year-on-year rise in product sales and said it still expected suspended multiple sclerosis (MS) drug Tysabri to return to the market.

    "Our overall costs are down, our revenues ... are up," Elan Chief Executive Kelly Martin told state broadcaster RTE on Thursday. "And from a cash perspective we still have well over $1.1 billion in cash on our balance sheet."

    The company posted a net loss per share of $0.16 for the three months to the end of September, down from a $0.28 loss in the same period last year and well below the $0.35 loss reported in the second quarter of 2005.

    It was also much better than the median forecast of five analysts polled by Reuters, who had predicted a net loss per share of $0.22. At $128.6 million, revenues were ahead of the $123.5 million expected.

    Elan's (ELN.L: Quote, Profile, Research) Chief Financial Officer, Shane Cook, remained optimistic that, excluding Tysabri, the company was on track to achieve its target of breaking even on core profit by year-end.

    "We continue to aggressively manage our cost base, while not compromising revenue growth or our ability to re-launch Tysabri," Cooke said in a statement.

    The fate of Tysabri, which is also being tested as a treatment for the bowel disorder Crohn's disease, is seen as key to restoring the fortunes of Elan (ELN.N: Quote, Profile, Research) , which has clawed its way back from near-collapse three years ago.

    "MAJOR PLAYER"

    The drug is so significant to Elan's fortunes that current earnings tend to play second fiddle but Jack Gorman, analyst at Davy stockbrokers, welcomed what he called impressive results.

    "Cash burn, as reported in Elan's cashflow statement, was also $16 million less than our own estimate, which suggests continued financial discipline on Elan's part as it awaits the fate of Tysabri," he said in a research note.

    Shares in Elan, which plunged from over 20 euros to a low of 2.25 euros in the wake of the decision to suspend Tysabri sales, were up 1.3 percent at 7.00 euros by 0806 GMT, outperforming a flat Irish market .

    After months of tests Tysabri has been resubmitted for U.S. regulatory approval. The company is waiting to find out if the drug will be given an accelerated safety review.

    "We certainly think, based on all the feedback and based on the drug itself, that Tysabri will be a major player in the MS market," Elan's Kelly told RTE. "There's 800,000 MS patients in the world, current therapy is inadequate, the efficacy of Tysabri stands alone and speaks for itself."

    Commenting on statements made overnight by its U.S. partner Biogen Idec (BIIB.O: Quote, Profile, Research) , Kelly said the companies had decided to abandon tests on using Tysabri to treat rheumatoid arthritis (RA) because of the extent of competition in that market.

    "Given the safety issues ... we decided ... we would not be pursuing RA but that may change in the future."

    Elan said revenue from its new pain killer Prialt fell to $1.5 million from $1.8 million in the second quarter.

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