Elan has more than halved its losses in the first quarter and said it hopes to be back in profit by the end of next year.

The pharmaceutical group, whose shares have made a dramatic comeback since their 2002 collapse, said yesterday that its drugs pipeline remained on track and it expected to file for regulatory approval for its flagship drug, Antegren, by the end of the current quarter.

The company also expects to file for pain drug Prialt and hopes the two drugs will be in the marketplace in the first quarter of 2005, helping it to return to the black.

"When it turns, it will do so decisively and quickly," chief executive Mr Kelly Martin said, adding that he hoped Elan would be in profit by the end of 2005.

Elan is in discussions with US and European regulators regarding potential filings for Antegren as a treatment for Crohn's disease as well as multiple sclerosis.

The group, which is emerging from an extensive asset disposal and restructuring programme, said its first-quarter net loss narrowed by 52 per cent to $67.1 million (€56.8 million) or a loss of $0.17 per share from $140.2 million, or $0.40, in the first quarter of 2003.

Elan, whose progress has been overshadowed by a US Securities and Exchange Commission (SEC) investigation into accounting practices, is also hoping to reach a resolution on this issue later this year.

The SEC has completed its investigation and talks between the two are expected to begin soon. "My wish is to get it wrapped up no later than the third quarter of this year, along with the shareholder litigation," Mr Martin said.

Overall revenues totalled $159 million in the first quarter, a 29 per cent drop on 2003, reflecting last year's disposals. Revenue from retained products rose to $75.4 million from $70.5 million a year earlier, partly reflecting growth in prescriptions. Elan said it was comfortable with full-year revenue forecasts of $475-$525 million this year.

Research and development costs fell to $67.5 million from $82.6 million a year earlier but Elan expects R&D spending to rise in the second quarter.

It said it was comfortable with full-year guidance of $300 million for expenditure in this area.

The company has not yet finalised its commercial plans for Antegren with its development partner, Biogen, but said it did not expect to invest more than $40 million this year in pre-launch costs for Antegren.

Elan had cash balances of $900 million at the end of the first quarter before the inclusion of an additional $250 million related to a number of things, including the sale of Zonegran. The company's investment portfolio was valued at $490 million at the end of March and Elan said it expected to continue to monetise this.

Mr Martin said that Elan was close to signing up new clients for contract manufacturing at its Athlone facility.