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Elan 1Q loss from continuing operations narrows

NEW YORK (AP) -- Irish drugmaker Elan Corp. PLC said Wednesday it took a smaller loss from continuing operations in the first quarter as it prepared to sell its ownership stake in the multiple sclerosis drug Tysabri.

During the quarter Elan agreed to sell its interest in Tysabri to Biogen Idec Inc., its former partner on the blockbuster drug, for $3.25 billion in cash and recurring royalty payments. The deal closed in early April.

Elan said it lost $72.8 million, or 12 cents per share, from continuing operations. That compares to a loss of $74.7 million, or 13 cents per share, one year ago. Including discontinued operations, Elan posted net income of $63.3 million, or 11 cents per share, in the latest quarter.

Revenue rose 19 percent to $344 million from $288.2 million. Almost all of its revenue came from sales of Tysabri: without Tysabri the company reported revenue of $200,000 in the latest quarter and in the first quarter of 2012.

Analysts expected the company to report net income of 2 cents per share and $326.2 million in revenue, according to FactSet.

Elan's statement did not comment on Royalty Pharma's offer to buy the company. Royalty, a New York-based private company that buys royalty interests in drugs and late-stage drug candidates, offered in February to buy Elan for $11 per share, or about $6.5 billion. It later raised that offer to $11.25 per share, or about $6.7 billion, but Elan has said that offer undervalues its business and prospects.

The Dublin company said it had about $2 billion in cash and cash equivalents at the end of the quarter. Last week, Elan completed a $1 billion stock repurchase, reducing its share count by about 15 percent. Elan plans to use the remaining proceeds of the Tysabri sale to refinance its debt and make investments that will diversify its assets.

The company plans to pay 20 percent of its Tysabri royalties to shareholders through twice-a-year special dividends.

U.S.-listed shares of Elan rose 9 cents to $12.08 in morning trading. The stock has traded between $9.37 and $14.60 over the past year.