CEO who rescued Elan names departure date
Former banker Martin will quit executive role in 2012
Kelly Martin, the chief executive of Irish drug firm Elan, is preparing to step down from the role in 2012 and will have "completed his commitment" to the company by 2013, according to a statement from the group yesterday.
A former Merrill Lynch banker, Mr Martin (51) took over as CEO with Elan in 2003 as the company found itself in imminent danger of collapse.
In its statement yesterday, Elan said that Mr Martin would revert from an open contract to a fixed-term contract with the company. That will result in him continuing until May 2012 as chief executive, when he will relinquish the role and assume a position on the board as an executive adviser until the end of January 2013.
"At that time, and after a decade of service to the company, he will have completed his commitment to the company," added the statement.
Elan's shares traded as high as $65 in 2001 valuing it at $22bn (€18bn) and making it the biggest company in Ireland. A spectacular collapse in its share price in 2002 triggered a put call repayment clause to a $1bn sum that hadn't been due to be repaid for more than another decade. The put call allows the bondholder to seek early repayment.
Shares slid further in 2003 after it emerged that a patient using its new Tysabri multiple sclerosis treatment during trials had contracted a life-threatening brain disease.
Accounting issues, an over-stretched balance sheet and a plethora of subsidiaries bought during an acquisition binge made for an unwieldy company that Mr Martin set about rationalising. A leaner structure emerged, focused on the development of a handful of drugs.
Debt was significantly reduced and the company is poised to make its first full-year profit in a decade this year.
Ian Hunter, an analyst with Goodbody Stockbrokers, said that Mr Martin was "exactly the right man" to lead Elan when the company's difficulties placed it on the possible extinction list. He added that the early announcement of his retirement timeline will eliminate any speculation in the market surrounding his departure date.
Mr Hunter said it was possible that given Elan's more solid financial position, a successor with a pharmaceutical background could be an appropriate choice to replace Mr Kelly.