Elan said yesterday that it remains on track to wrap up a US regulatory investigation into its accounting practices by the end of the third quarter, suggesting an announcement on the issue should be forthcoming by the end of the month.
Elan chief executive Mr Kelly Martin told an investor conference in New York yesterday that the company was in active discussions with the Securities and Exchange Commission (SEC) and hoped to wrap up the issue in the next few weeks.
It is also in talks about resolving a number of class action lawsuits filed against the company in the wake of the announcement of the SEC probe in 2002.
Analysts said a resolution of the inquiry into the firm's accounting practices would remove uncertainty from the stock, bringing relief to investors.
"Though very difficult to gauge, we believe an SEC cash penalty below $100 million (€82 million) would be a reasonably benign result for the company - at the very least, final resolution would be greeted with relief," Mr Jack Gorman of Davy Stockbrokers said.
Mr Gorman noted that two high-profile US cases have reached settlement with the SEC in the last two months, suggesting that the agency is successfully working through its investigations.
At the end of July, Bristol-Myers Squibb paid a $150 million cash penalty as part of its agreement with the SEC while US telecommunications group QWest has agreed to pay a $250 million cash settlement.
The announcement of the SEC investigation in 2002 was one of the factors that triggered a collapse in the Elan share price and a liquidity crisis that forced the company to restructure by selling assets and cutting staff numbers.
