Elan has announced plans to simplify its operations and strengthen corporate governance in an attempt to restore investor confidence in the troubled company.
The battered drugmaker, whose shares have lost more than 85 per cent of their value since January, said it would focus its activities on three key areas: neurology, pain management and auto-immune diseases such as multiple sclerosis.
It also plans to sell non-strategic businesses and assets although it declined to name which ones yesterday. It will set up a new stand-alone business unit, called Elan Enterprises, to take charge of its 50 business ventures and the selling-off of non-core assets.
However, analysts said there was little new in the company's plan, which was short of detail in places and had not gone as far as expected. "Most of the information revealed had already been released by the company," said Mr David Marshall, analyst at NCB Stockbrokers. He also noted there was a lack of detail regarding the intended divestments.
Others said that Elan had been expected to opt out of areas such as oncology, dermatology and acute care completely but was maintaining a presence in these areas.
Nonetheless, the shares, which regained 16 per cent last Friday after losing 21 per cent of their value the day before, continued to edge up yesterday. They closed 55 cents higher at €8.55.
A company spokesman said the action plan, which was already under way and should be completed by December 2003, would not involve significant lay-offs among its 4,500 staff worldwide.
He also said Elan's 900 staff in Athlone would not be affected by the changes while plans to develop the former GSI plant in Macroom, Co Cork, with the creation of up to 300 jobs over the next five years was also going ahead.
In a bid to reassure shareholders, Elan also took steps to beef up its corporate governance. It has created a position of lead independent director, to be filled by current Elan director and former US Attorney General Mr Dick Thornburgh.
It announced the creation of a separate committee to nominate directors and plans to change the company charter so that all directors, including the chairman, would stand for election by rotation.
However, market sources noted that Mr Donal Geaney had retained his dual position as chairman and chief executive despite pressure to resign over his handling of the company during Elan's disastrous stock market slide.
Once the largest company on the Irish stock market, Elan has seen its market capitalisation plunge from almost €22 billion to around €3 billion.
