It's jam today at Elan
Sunday October 26 2008
FOR longer than I care to remember, Elan has been a jam tomorrow outfit -- always promising shareholders good times to come but never delivering in the here and now.
However, this week's third-quarter results, which showed operating (pre-interest) losses narrowing to $39.3m for the three months to the end of September, as against $63.6m for the same period last year, show the company may be about to start delivering.
In July the share price fell by two-thirds overnight on the news of further problems with its multiple sclerosis drug Tysabri. The share price now stands at just €5.19, less than a quarter of last July's level.
However, Tysabri is now, in the words of Elan chief financial officer Shane Cook, "fast approaching blockbuster status" with worldwide sales of $237m in the quarter ended September 30. And it wasn't just Tysabri. Elan now has a series of other promising drugs including bapineuzumab, which is used to treat Alzheimer's disease, in the pipeline.
Despite this, Elan is now worth less than €2.5bn at the current share price. If the Elan share price doesn't recover soon, it will be very much a question of when, rather than if, one of the big boys snaps it up.
- Dan White
