Irish pharmaceutical firm Elan reported net income of of $68.2 million in the first quarter of 2011, with revenues of its multiple sclerosis drug Tysabri rising by 23 per cent.
The company, inwhich US firm Johnson & Johnson holds an 18 per cent stake, said the revenue growth from the drug combined with tighter cost management helped boost the firm in the first three months of the year, and helped offset the decline in revenue from legacy products.
Tysabri was given an additional boost earlier this week when European regulators approved updated labelling, which includes a warning citing an additional risk factor, anti-JC virus antibody status. This is seen as allowing doctors to assess more accurately patients for suitability for treatment with the drug.
The drug has previously been linked with the onset of a potentially fatal brain condition, progressive multifocal leukoencephalopathy (PML), and was temporarily withdrawn from the market in 2005. However, all incidences of the disease to date have occurred in people with the JC virus – a group which accounts to just over half the MS populaiton.
Elan reported adjusted earnings before interest, tax, depreciation and amortisation (Ebidta) of $63.3 million for the quarter. The firm also booked a legal settlement gain with Abraxis Biosciences of $78 million during the three-month period, in respect of a 2008 patent infringement case.
Operating income excluding the legal settlement and other net charges $40.1 million in the first quarter, compared to $36.2 million in 2010.
"This improved operating performance principally reflects the continued growth of Tysabri and a 9 per cent decrease in combined selling, general and administrative, and research and development expenses, compared to the first quarter of 2010, partially offset by a lower gross margin due to the loss of higher gross margins associated with the legacy products," Elan said.
Total revenue rose to $313 million from $310.5 million a year earlier. Sales of Tysabri accounted for $245.2 million in the first quarter, from $198.8 million in 2010.
"This is a unique time for Elan and we remain focused on driving further operating leverage into our business. At the same time, we will continue to intelligently invest in both science and clinical activities that may differentiate Elan globally as it relates to innovation and focus on neuroscience," Elan chief executive Kelly Martin said.
Chief financial officer Shane Cooke said the year had started strongly, and said the outlook for the rest of the year remained positive.
"We are re-confirming our full-year guidance to be cash flow positive, and now expect adjusted Ebidta to exceed $200 million, driven by accelerating revenue growth," he said.
Shares in the firm were off 1.4 per cent this afternoon, falling to €5.698 on the Dublin market.
