Elan 'on track' for $1.2bn revenue

Irish biotech firm Elan grew its revenue and said it was on track to meet its guidance for the year, as it put in a “solid” performance ion the first quarter.

Revenues for the group rose to $288 million (€217.5 million), beating forecasts of $285 million from Reuters analysts and putting the firm on track to meet its target of $1.2 to 1.25 billion in revenue for the year.

"This solid start to the year places us on track to achieve our full-year financial guidance," Elan chief financial officer Nigel Clerkin said in a statement.

The figures were lifted by sales of multiple sclerosis drug Tysabri, which Elan co-markets with Biogen Idec. The drug’s revenues were up 14 per cent to $399 million over the quarter, slightly lower than analyst expectations of $402 million.

About 66,500 patients were on Tysabri worldwide at the end of March, with almost half of those in the US.

Elan’s net loss from its continuing operations widened to $31.8 million, from $27.7 million a year earlier. This includes a 13.3 per cent loss incurred on the disposal of 76 per cent of Elan’s stake in Alkermes. Elan had received the shares as part of a cash and shares deal to sell the Elan Drug Technologies (EDT) business in September last year. Elan retains a 6 per cent stake in the firm.

Elan, which adds $100 million to its bottom line for every 10,000 extra patients it adds to its MS treatment, has said continued sales growth in Tysabri would lead to overall revenue growth of 15 per cent per year over the next three to five years.

It expects to make adjusted earnings before interest, taxes, depreciation and amortisation of at least $200 million for 2012 versus the 147 million earned in 2011.

The company is currently awaiting Phase III data in the second half of this year on experimental Alzheimer’s drug bapineuzumab. The development of the drug was originally a joint venture between Elan and Wyeth. Pfixer has since acquired Wyeth and in 2009, Elan gave half of its share to Johnson & Johnson when the US firm took an 18.4 per cent stake in Elan for $1 billion.

Elan will get about a quarter of potential profits from the drug if it comes to market, making it an important part of the company’s future strategy.

“The opportunities and patient need in the broad area of neurology are significant,” chief executive Kelly Martin said. “We remain focused on the short and long term execution of our plans and committed to extending our leadership in the area of discovery and innovation while, at the same time, offering a unique investment proposition to current or prospective shareholders.”

Mr Martin, who was due to step down in May, was asked by Elan’s board to remain at the firm until the data has been evaluated.

Elan chairman Robert Ingram said the board felt it would best serve the company and its shareholders for Mr Martin to remain at the company until data from trials of bapineuzumab, which is potentially of “transformational significance” for Elan, has been shared publicly, evaluated and assessed.

Additional reporting: Reuters