An increase in sales and rising interest income at Elan Corporation were the main reasons for the strong 52 per cent increase in after-tax profit to $176 million (£126 million) last year, according to its annual results.
Sales increased by 29 per cent, from $310 million in 1996 to $389 million last year, while earnings per share rose to $1.76 from $1.35.
The increase in net interest income is due to significantly higher levels of cash resulting from the raising in November of $325 million of new funds.
The pharmaceutical and drug delivery company's product sales, including those by Elan's client companies, showed a strong increase in the fourth quarter, rising by 32 per cent to $62 million in the last three months, compared to the same period in the previous year.
Royalties and fees increased to $31 million in the fourth quarter of 1997 compared with $22 million with the same period of 1996. Pre-tax profit in the fourth quarter was $52 million, as against $31 million for the same quarter in 1996.
Overall growth last year reflected new licensing transactions and significant earnings made under existing agreements. It was also the first full year since the acquisition of Athena Neurosciences, which moved the company into biotechnology.
Elan chief executive officer and chairman, Mr Donal Geaney, said the results were pleasing and he noted that sales of products directly marketed by Elan exceeded $120 million in 1997 - more than double their 1996 level. For the future, the company hopes its development of a drug to treat Alzheimer's disease will result in record levels of growth.
While the unnamed drug is not expected on the market for about five years, there is currently no cure available for the condition.
Elan announced yesterday a joint venture with US research development company, Neuralab, to fund further research into the drug.
"Alzheimer's disease is the fourth biggest killer in the world and we see this as one of the most important products we have ever been involved in," said Mr Geaney.
The drug is called ABeta 42 and removes plaque traces from the brain.
The joint venture agreement between Elan and Neuralab involves the private placing of 1.25 million "units" - each one consisting of one ordinary Neuralab share and one Elan warrant, exercisable at $65, rising a gross $50 million for Neuralab,
Elan has also announced it is seeking a site in Dublin for a new drug research centre to employ between 200 and 250 people. It currently employs over 700 people at its manufacturing base in Athlone, Co Westmeath, and 100 people in Dublin. Mr Geaney said "protracted" talks were taking place with several interests, among them the Dublin Docklands Development Authority about a site for the new centre.
