Sales of Tysabri fuel growth in Elan profits

IRISH BIOTECH group Elan reported profit after tax of $52 million in the third quarter, driven by strong growth in sales of multiple sclerosis drug Tysabri and factors associated with the recent $885 million investment by Johnson & Johnson.

Over 46,300 patients are now taking Tysabri, a 30 per cent increase on the same period last year. Sales of the drug rose 16 per cent to $191.4 million in the three months to September, accounting for two-thirds of Elan’s group revenue of $287 million.

That 6 per cent rise in revenue, dragged down by a fall at the drug technologies unit, was below analysts’ expectations. However, the company delivered a better than expected 12 per cent fall in operating expenses, reducing its operating loss before exceptionals to $1.7 million.

“They are a solid set of numbers with very good cost control within the existing business,” said Goodbody’s analyst Ian Hunter. “You’re expecting revenues will continue to improve with the Tysabri franchise and if they’re keeping their costs down, you’re into profit.”

Elan chief financial officer Shane Cooke said the company expected to be profitable at the operating level in the fourth quarter “ahead of where we would have been targeting”.

Elan also updated its full-year guidance. It now expects to report a profit in the region of $75 million for the full year, before interest, tax, depreciation and amortisation (Ebitda), better than previously expected and the first time the company has put a figure on its 2009 performance. It expects to deliver double-digit revenue growth for the full year.

Mr Cooke said Elan had achieved market share of 10.2 per cent at the end of the second quarter of 2009 “and should be striving to get that to 20 per cent”.

Company president Carlos Paya said Tysabri was eating into the market share of rival Teva’s Copaxone drug. He said he had no fears about future challenge to Tysabri’s growth from a new generation of drugs. He said Tysabri was “underused” and that new patient numbers should continue to grow at current rates, if not accelerate. Tysabri’s efficacy was “unparalleled” compared to others in the markets and to likely new entrants, he said.

Mr Paya had no further information on an announcement by Biogen on Tuesday that Tysabri patients’ risk of contracting the brain disease progressive multifocal leukoencephalopathy (PML) increased with their length of time on the drug and that it was in discussions with the US Food and Drug Administration (FDA) with a view to amending the drug label.

He said the companies were in continuous communication with the FDA and would follow its recommendations.

Chief executive Kelly Martin refused to comment on an ongoing inquiry by the Securities and Exchange Commission (SEC) into two incidents back in July 2008 – the announcement of PML cases a week after an upbeat assessment of Tysabri and the announcement of clinical trial data on bapineuzumab, the Alzheimer’s drug Elan has been developing with Wyeth. – (Additional reporting: Reuters)