Elan takes smaller loss after drug tech unit sale

Elan takes smaller 2nd-quarter loss after selling drug technology unit and paying back debt

Associated Press

NEW YORK (AP) -- Irish drugmaker Elan Corp. PLC said Wednesday it took a smaller loss in the second quarter compared to a year ago after it sold its drug technology unit and used some of the proceeds to repay debt.

Elan said its interest expense fell by more than half after it sold the drug technology business to Alkermes PLC for $960 million in cash and stock. The company said revenue from its multiple sclerosis drug Tysabri, which it markets through a partnership with Biogen Idec Inc., rose 2 percent. However those sales were hurt by unfavorable foreign currency exchange rates and a $16.3 million charge against Tysabri revenue reserves in Italy.

The Dublin company said it lost $28.5 million, or 5 cents per share, in the latest quarter. In the second quarter of 2011 Elan took a loss of $47.1 million, or 8 cents per share. Revenue increased 6 percent to $288 million from $270.6 million.

Analysts were forecasting a loss of a penny per share and $299.8 million in revenue, according to FactSet.

Elan's U.S.-listed shares fell 12 cents to $11.40 in morning trading.

Elan markets Tysabri in the U.S. after buying its supply from Biogen Idec. Biogen sells the drug in other markets and pays royalties to Elan. Elan said worldwide sales of Tysabri rose 2 percent to $395.5 million. Revenue in the U.S. grew 16 percent to $211.5 million, but revenue from other markets declined 11 percent. Biogen has had to defer some of its revenue from Tysabri sales in Italy because the national health agency said sales of Tysabri had exceeded a limit it established in 2007.

The use of Tysabri is tightly controlled because the drug is linked to a deadly brain infection known as progressive multifocal leukoencephalopathy.

The company said approximately 69,100 patients were being treated with Tysabri at the end of the quarter. That's up 13 percent from a year ago and an increase of 4 percent from the end of the first quarter of 2012.

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