Elan upbeat on Tysabri as losses sharply reduced

Drug company Elan yesterday reiterated its confidence that the US Food and Drug Administration would approve plans to reintroduce the company's breakthrough multiple sclerosis treatment, Tysabri, to market - possibly as early as next April.

The group also announced sharply reduced third-quarter losses on the back of improving revenues and tighter cost control.

The results, which were significantly ahead of forecasts, showed a 38 per cent fall in net losses on the year-ago period to $67.1 million (€55.27 million), or 16 US cents per share. That compared with losses of 28 cents a share last year and a consensus forecast among analysts of 22 cents a share losses.

But Elan said it had decided to shelve plans to develop Tysabri as a treatment for rheumatoid arthritis. Research chief Dr Lars Eckman said limited trial data "suggested we did not have superiority over treatments already available".

Chief financial officer Shane Cooke acknowledged the figures were distorted by the cost of settling litigation and product divestments last year. However, he said the company was on target to break even in terms of earnings before income tax, depreciation and amortisation in the current quarter, once the Tysabri business is stripped out.

Elan reported a 40 per cent rise in product sales to $118.4 million year-on-year in the three months to the end of September. Total revenue jumped 27 per cent to $128.6 million.

The company's fast-growing drug technologies business almost doubled sales to $57.8 million.

Chief executive Kelly Martin said the results reflected "continued cost discipline" at the group and moves to reduce its dependency on Tysabri.

However, he said the company continued to expect a successful return to market by the MS drug, which was withdrawn in February after two trial patients contracted a rare and generally fatal neurological condition, progressive multifocal leukoencephalopathy (PML).

Dr Eckman said the company and the regulator, the Food and Drug Administration (FDA), now had considerably more information about the drug and the MS patients. Two-year trial data available since the drug's suspension showed it reduced relapses in MS patients by almost 70 per cent compared to around 30 per cent for other treatments. "The FDA looks at the overall benefit and risk of the drug and, for Tysabri, that ratio has improved," he said.

The company will hear from the FDA by November 26th whether Tysabri will receive priority review.