Europe hits Elan's Tysabri revenues

SHARES IN biotech group Elan continued to fall yesterday a day after a drug developed by the company failed one of four key clinical trials.

The company also posted second-quarter results yesterday showing continued resilience in its multiple sclerosis drug Tysabri but pointed to problems with revenues from its European operation.

Elan executives were able to provide no further details of the clinical trial in which the drug bapineuzumab proved ineffective in treating Alzheimer’s patients in a particular cohort who have a gene variant which is associated with the risk of developing the disease.

Chief executive Kelly Martin said Elan – which has a 24 per cent interest in the drug but has ceded control of its development to Johnson Johnson and Pfizer – was “blinded to the data and the process” and would have to await fuller results which will be publicly announced in September.

Initial figures from a second of the four trials are due within weeks and will be more closely watched.

Mr Martin said the company would not be derailed by the failed trial or the sharp fall in the share price.

“We have built this company to move forward with or without bapi,” he said on a conference call.

“We cannot control short-term equity [market] movement up or down; we can only concentrate on the fundamentals of the business.”

On its performance in the quarter, Elan said a mix of adverse foreign exchange movements and a dispute with Italian authorities over pricing saw Tysabri in market revenue fall 11 per cent in Europe to $184 million even as it grew 16 per cent in the US.

The pharmaceutical company said that more than 69,000 people were now taking Tysabri, with an average of 185 patients a week being added, up from 162 a week in the first three months of the year.

Chief financial officer Nigel Clerkin said the 2,400 patients signed up over the quarter was the highest number since 2009.

Overall, Elan reported sales of $288 million in the three months to the end of June, up 6 per cent on the same period last year. The net loss was down from $42 million to $18 million in the period largely due to lower interest charges.

Following the paying down of debt at the end of last year and the sale of three-quarters of its stake in Alkermes – acquired in the sale of its drug technology business – in the first quarter, Elan now has cash and investments of around $800 million, the company said compared to what Mr Martin referred to as “nominal” debt of $600 million which is due for repayment in 2016.