SHARE PRICE: The announcement yesterday by Irish-based Elan Corp that a new pain treatment has been approved by the US Food and Drug Administration has little effect on the company's share price.

Marketing approval has been granted for Avinza capsules, a once-daily extended release morphine treatment of chronic, moderate-to-severe pain in patients who require around-the-clock therapy for extended periods.

Elan shares rose by 25 cents in Dublin, up from €15.65 to €15.90. In New York the share price was $14.20, up 20 cents.

Analyst Mr Jack Gorman said the announcement was good news for Elan, despite expectations that revenue from the new product would be small relative to the company's overall turnover.

Mr Gorman, who works for Elan brokers Davy Stockbrokers, said revenue for the new product was forecast at €7.95 million for this year, against overall revenue of €1.9 billion.

Forecasted revenue from Avinza for 2003 is €40 million.

The US and Canadian marketing rights to the product were licenced to Ligand Pharmaceuticals in 1998. Elan retains marketing rights for the rest of the world.

Mr Gorman said the market was focusing on the company's sales of lead products and its ability to fund further deals.

Elan shares fell 7 per cent on Wednesday after Moody's Investors Service downgraded the company's debt rating to junk status on the back of weak operating cash flow from core product sales.

The Elan share price has been on a downward spiral since mid-January following the abandonment of trials into its Alzheimer's treatment, a profit warning for 2002, and a probe into allegations of deceptive accounting practices by the US Securities and Exchange Commission.

The Alzheimer's trials left 15 people suffering from brain inflammation.

In mid-January, Elan shares were selling on the Dublin exchange for €50.27. By late February they were selling for just €14.50.