Sales of Tysabri drive revenue in first quarter for pharmaceutical firm Elan

REVENUE AT Irish pharmaceuticals group Elan was ahead in the first quarter, driven by sales of its multiple sclerosis drug Tysabri.

However, that drug, on which the company’s short-term prospects rest, continues to undershoot targets as a number of cases of the potentially fatal brain disease progressive multifocal leukoencephalopathy (PML) emerged in the second half of last year.

Sales growth in the last six months has slowed dramatically, particularly in the United States, where the company added just 600 new patients in the first three months of 2009, compared with 2,400 in the same period last year.

Overall, revenue jumped 14 per cent in the first quarter to $245 million (€188 million), and operating losses fell 18 per cent to $35 million.

However, after allowing for exceptional costs incurred in a restructuring of the group’s biopharma business and postponing the construction of a Dublin biologics plant, alongside a tax charge, losses after tax jumped at the firm almost 20 per cent to $103 million.

The company had no news for investors on the progress of the strategic review being undertaken by Citigroup for Elan.

Chief executive Kelly Martin reiterated that the review was triggered by the scale of any market for a successful Alzheimer’s drug.

“We think the best option for Elan would be to have a partnership with a large pharmaceutical company that has an existing infrastructure globally,” he said, without clarifying whether the company continued to favour the sale of a minority stake over an outright takeover.

Mr Martin noted that the market for patients with mild to moderate Alzheimer’s worldwide was somewhere between 10 and 20 million people.

The numbers of new patients on the Tysabri programme had already been announced earlier in the week when Elan’s partner in that drug, Biogen Idec, reported its figures.

And there was no significant update on the progress of the company’s most advanced Alzheimer’s drug programme, being run in conjunction with Wyeth.

In the absence of other information, analysts concentrated on the rate at which Elan is using its cash reserves.

Goodbody’s Ian Hunter said the company’s cash burn was greater than expected, while Jack Gorman at house broker Davy noted that lower than expected RD costs reflected “the current constraints on Elan’s cashflow”.

The company continues to project double digit revenue growth for 2009 as a whole and expects to be profitable on an adjusted Ebitda basis.