The initial reaction to Elan's fullyear results this week was pretty lukewarm, but the reaction in the market seems to be one of "forget the 1999 results, wait for the 2000 approvals" as the shares were driven higher in heavy trading. Bullish comments from Warburg Dillon Read and Merrill Lynch simply fuelled the demand.
Elan, which has repositioned itself in recent years as a more broad-based pharmaceuticals company, has its future over the next year tied up with four drugs which are awaiting approval from the Food & Drugs Administration. There's no question that if these applications for Ziconitide (pain treatment), Zonagran (epilepsy), Frovatriptan (migraine) and Neurobloc (dystonia) all get approval over the next year, Elan will be a transformed organisation.
Whether that means that Elan will regain its $44 (€45) high of a year ago remains to be seen, but Merrill Lynch has put a $45 12-month target price on the shares, a price that would probably make Elan the biggest Irish company given the current antipathy to bank shares. In such a situation, isn't it extraordinary that Irish fund managers still to a considerable degree spurn the stock?
