Elan reports $14m operating profit

BIOTECH GROUP Elan reported an operating profit of $14 million for its third quarter yesterday despite a fall in sales.

After tax, the company reported a loss of $44 million compared to a profit at the same point last year of $52 million. However, the year ago figure was skewed by the $105 million investment in the company by Johnson Johnson.

Turnover was down 2 per cent year on year to $281 million with growth of the company’s multiple sclerosis (MS) drugs Tysabri and Ampyra not quite offsetting lost revenue on older and discontinued products.

Sales of Tysabri at $215.9 million came in below market expectations with global revenue growth of 9 per cent. Chief financial officer Shane Cooke said adverse foreign exchange movements and a reduction in inventories had affected the figure.

However, analyst Ian Hunter, of Dublin broker Goodbody, expressed concern at a decline in the average price of the drug per patient over the quarter and the continuing increase in the numbers of patients quitting therapy.

Company president Carlos Paya said more than 55,000 people were now taking Tysabri, an increase of 20 per cent on the same point last year.

He said Elan and its US partner Biogen, had made considerable progress in developing a test that would identify which MS patients were more at risk of contracting a rare but potentially fatal brain disease as a result of treatment with Tysabri. On the flip side, he said the test indicated that close to half of MS patients had a much lower risk of contracting the dangerous side effect from Tysabri therapy.

The companies are in discussion with regulators about amending the product’s label to clarify the different risk levels.

Dr Paya also confirmed that Elan was moving one of its Alzheimer’s pipeline drugs into phase III clinical trials. The drug is being developed in partnership with Transition Therapeutics.

Mr Cooke said the company aims to be profitable after tax by the end of next year.

The company completed a $200 million bond issue in September.