Elan missed a fifth deadline for filing its 2002 annual report yesterday, forcing it to pay bondholders $2.1 million (€1.86 million) to secure a further one-week reprieve.

The pharmaceutical firm was due to file its accounts with the US Securities & Exchange Commission (SEC) by close of business yesterday or face defaulting on nearly $2 billion of debt.

However, it bought a further week to finalise the accounts when the holders of $840 million of its EPIL debt agreed to give the firm another seven-day waiver, until August 22nd. But for the first time, they set a price of $2.1 million for the extension.

Shares in Elan fell as analysts said the latest delay in filing its Form 20-F added to the uncertainty surrounding the company.

Elan had originally been due to file the form by June 30th but has consistently delayed filing due to disagreement over its accounts.

In New York, where it is mainly traded, Elan stock shed 3.83 per cent to $4.77. In Dublin, it lost 7 per cent to €3.91 at one stage before recovering to close unchanged at €4.22.

"Although we believe the company will be given until September 14th to file its 20-F, the continuing delay increases nervousness," said Goodbody analyst Mr Ian Hunter.

Analysts believe the EPIL holders are likely to grant Elan further reprieves if needed because their debt ranks beneath other categories of debt in the event that Elan defaults.

However, holders of some $650 million of senior loan notes are not expected to be so forgiving and are likely to call in their debt, triggering other repayments and a cash crunch, if Elan has not filed by September 14th - the date set for receipt of the accounts in the loan note covenants.

Elan again declined to provide any assurances as to when it might complete and file its annual report yesterday. But it said that it was working with its auditors, KPMG, "to conclude all audit-related issues and matters in order to complete Elan's 2002 Form 20-F as soon as practicable".

Analysts said this suggested it was the company's auditors that were delaying the filing, rather than the SEC.

While Elan did not specify the issues under discussion with the auditors, market sources believe they relate to the proposed restatement of Elan's 2001 audited accounts.

Elan has already said that it expects to restate its 2001 financial results to consolidate an off-balance sheet vehicle, EPIL 3. The restatement is expected to reduce Elan's diluted earnings per share for 2001 by more than 20 per cent to around $0.75.