First-quarter profit boost for Elan as sales of Tysabri rise
PROFITS at Irish drug company Elan were boosted during the first quarter by a strong performance of its Tysabri multiple sclerosis treatment, which is now generating an annual revenue run-rate of $1.4bn (€963m) for the company and its US partner, Biogen-Idec.
Releasing results yesterday for the first quarter of its financial year, Elan, in which Johnson & Johnson has just over an 18pc stake, said that adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) at the group rose to $63.3m (€44.6m) for the period from $61.4m in the corresponding quarter a year earlier.
Net income jumped to $68.2m (€48m) compared to a net loss of $6.8m in the first quarter of 2010.
That included a $78m (€55m) payment received in respect of a legal settlement.
Total revenue was $313m (€220.6m) compared to €310.5m a year earlier.
Speaking to journalists, chief executive Kelly Martin also refused to be drawn on when his successor might be announced.
Mr Martin is due to step down from the role in May next year. He said some discussions had already taken place at board level regarding a replacement.
Chief financial officer Shane Cooke noted Elan's share of revenue from Tysabri during the quarter rose by just over 23pc to $245.2m (€172.8m) from $198.8m a year earlier.
Elan's share of Tysabri revenue from the US rose 25.6pc to nearly $170m (€119.8m), while from the rest of the world -- which is primarily accounted for by Europe -- it was 18.3pc higher at $75.3m (€53m).
Mr Cooke confirmed the company's guidance for the year, adding he expects Elan to post total EBITDA for 2011 of in excess of $200m. He declined to be more specific.
There are currently 58,400 patients using Tysabri, a 16pc increase on this time last year. Davy Stockbrokers estimated last week that Elan's annual earnings could be boosted by as much as $350m if a new blood test encourages more multiple sclerosis sufferers to opt for treatment using the drug. The broker thinks up to 35,000 additional MS patients could sign up for Tysabri as a result of the test availability.
The blood test will be widely available in Europe from next month.
The blood test determines whether patients carry antibodies to the so-called JC Virus, which is known to be a contributing factor to raising the chances among Tysabri users of contracting a potentially deadly brain disease. Neither Mr Cooke nor Mr Martin declined to say whether they believed the Davy projections were feasible, but said Tysabri, which has a 10pc market share, has the potential for "significant" growth.
For every 10,000 patients that use Tysabri, Elan generates an additional $100m in earnings, according to Mr Cooke.
Shares in the company closed down 6 cents at €5.72 in Dublin trading.