After a decade of turmoil, Elan is back in profit, at least at the pre-exceptional operating level. The company’s volatile past is evidenced by the inclusion of a previously announced $206 million settlement for unauthorised marketing of epilepsy therapy Zonegran, which blotted the company’s performance at the pre-tax level.
Elan remains a business in transition. The accounts point to the disappearance of a number of older portfolio products on which Elan had relied for revenue in the lean years. Meanwhile, the Holy Grail of a breakthrough treatment for Alzheimer’s disease remains some way off.
The company’s medium-term future is inextricably linked with its blockbuster multiple sclerosis drug Tysabri, which accounted for 73 per cent of sales last year.
IRISH BIOPHARMACEUTICALS group Elan has returned to operating profit for the first time in a decade on the back of its breakthrough treatment for multiple sclerosis.
The company, which employs about 1,000 people in the US and Ireland, yesterday reported an operating profit before exceptionals of $75 million in 2010. It expects to deliver core growth of 20 per cent for the current year.
The improved performance was led by the group’s bio-neurologics division, which focuses on therapies for multiple sclerosis, Alzheimer’s disease and Parkinson’s disease, and by the MS drug Tysabri in particular.
The group’s other division, Athlone-based Elan Drug Technologies, saw turnover fall slightly to $274 million (from $276 million) as the company phased out a number of legacy drugs. However, Ampyra, an oral drug to improve walking in MS patients, which was launched last March, was a major contributor to sales in the fourth quarter of 2010, the company said.
Tysabri revenues rose 18 per cent over the year to $851.5 million and now account for 73 per cent of company turnover. Overall group revenue increased by 5 per cent to $1.17 billion in line with forecasts.
Analysts welcomed the figures, which were slightly ahead of forecasts, especially as there had been concern about the patient growth for Tysabri earlier in the year.
The number of patients on the drug rose 17 per cent last year to 56,600, split almost evenly between the US and the rest of the world.
Company chief financial officer Shane Cooke said Elan was aware that some doctors were interrupting patient treatment for as long as six months in an effort to reduce the risk of the rare but potentially deadly brain condition, progressive multifocal leukoencephalopathy (PML).
It has applied to the Securities and Exchange Commission for permission to amend the drug’s label to note that patients testing negative for the JC virus are not at risk from PML. A decision is expected from the commission later this year. The company is running two trials in this area at present and, with its US partner Biogen, has developed a straightforward test to detect the virus in patients.
Overall, Elan reported a loss after tax of $325 million, due largely to a $206 million settlement with the commission over marketing of an anti-epilepsy drug Zonegran in a case that dates back to early 2004.
The loss compared to a 2009 figure of $176.2 million, a figure boosted by the exceptional gain of close to $110 million, related to the transaction that saw Elan join forces with Johnson Johnson in the development of its prospective Alzheimer’s therapy, Bapineuzumab.
The company also paid back and refinanced its debt, cutting the overall amount by 17 per cent to $1.285 billion and extending its maturity dates.
ELAN RESULTS:
Turnover$1.169bn (+5%)
Operating profit(before exceptional): $73m (-$9.5m)
Earnings per share-56c (-35c)
