Shares in Elan surged by xx per cent yesterday after the company said its asset disposal programme would realise more than the targeted $1.5 billion (€1.52 billion).
Despite reporting a bottom-line net loss of more than $1 billion in the third quarter - the largest ever for an Irish company - Elan shares finished 21 cents higher in New York at $1.71.
In Dublin, they also enjoyed a good day, gaining nearly 18 per cent to €1.78.
The stock was buoyed by news that Elan's asset disposal programme was proceeding ahead of schedule and should bring in more than originally anticipated.
Executive chairman Mr Garo Armen said he expected the disposals to realise "well over" the target and to be completed ahead of the 2003 deadline. He also said Elan could end up selling more businesses than it had earlier anticipated as part of a process which has realised more than $460 million to date.
"We have a higher demand for our businesses out there than we anticipated earlier," he said.
He was speaking after the release of third-quarter results, which showed a net loss including charges of $1.004 billion.
On top of a loss of $60.7 million, or 17 cents per shares, Elan incurred exceptional charges of $943 million, including a charge of $632.3 million related to its investments.
Costs related to its recovery plan came to $203 million, including $24.3 million related to the closure of Elan's facility at Trinity College Dublin.
Total revenue fell by 30 per cent to $340 million in the three months to the end of September, due to a 42 per cent drop in product revenue.
Compared with the second quarter, product revenue was down by $154.8 million, with the fall-off in Zanaflex sales due to generic competition accounting for nearly $60 million of this drop.
However, Dr Armen pointed to the increase in prescriptions for a number of key drugs such as Skelaxin, Sonata and Zonegran which were up by 13 per cent, 1 per cent and 87 per cent respectively over the quarter.
"Our base products remain healthy with growing prescription trends," he said. He also said the company's pipeline was "very much" on target.
Elan expects to file four new drug applications by the end of 2004 and up to five investigational new drug applications by the end of 2003.
Meanwhile, it has cut 700 of the 1,000 jobs it expects to go by year-end, 320 of them from its Irish operations. The company said severance costs in the quarter came to $35 million.
According to Dr Armen, Elan's search for a new chief executive was "coming along well".
"It's probable that we will have an announcement of a new CEO by the end of January," he said.
However, according to Dr Armen, there was nothing new to report on the investigation by the Securities and Exchange Commission (SEC) into Elan's accounting practices which has been slowed down by the huge backlog of work facing the SEC.
However, Elan said SEC-related legal costs allied to shareholder litigation had cost the company $16.5 million in the quarter and such costs would continue to be incurred into next year.
Elan's cash balances at the end of September, seen as key to the company's recovery, were $632.9 million and this should rise to more than $1 billion once the $420 million cash proceeds from the recent Abelcet and Actiq deals is realised.
