MS drug sales help Elan cut losses
Irish pharmaceutical group Elan sharply narrowed its second-quarter net loss to $47.1m (€32.8m) from $218m a year earlier as sales of its multiple sclerosis treatment Tysabri increased and the impact of a one-off $200m-plus legal settlement last year wasn't repeated.
Releasing results yesterday, the company said that total quarter-on-quarter revenue in the three months to the end of June had risen 24pc from last year, to $333.5m.
It made an operating profit of $24.4m, compared with an operating loss of $210m a year earlier. In the second quarter of 2010, Elan had set aside just over $206m for an expected settlement in relation to how it marketed an epilepsy drug, Zonegran. That money was paid in March this year.
Elan chief executive Kelly Martin said the latest set of quarterly results displayed an "acceleration in both the financial potential of the company, as well as providing clarity on the strategic positioning".
Elan, in which drug giant Johnson & Johnson has an 18pc stake, has already inked a $1.1bn deal to sell its drug technology division. That sale is expected to close in late September or early October. Elan plans to use a large part of the $500m cash proceeds to pay down its debt.
The company also reaffirmed its full-year guidance of generating $1bn in pro-forma revenues this financial year, and to double that within the next five years. It expects to post adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of $200m for the year.
It raised its EBITDA guidance for its bioneurology division by 35pc to $135m.
Elan's chief financial officer, Nigel Clerkin, said that there were now 61,500 people using Tysabri, up from just over 53,000 at the end of the second quarter in 2010 and 58,400 at the end of the last quarter.
Elan reckons that there will be 750,000 people around the world taking drugs to treat multiple sclerosis by the end of 2015. The company believes it can have upward of 100,000 of them using Tysabri. Its partner on Tysabri is US firm Biogen-Idec.
Israeli rival Teva, which is the world's largest maker of generic drugs, beat analyst expectations yesterday with a jump in quarterly earnings due in large part to robust sales of its multiple sclerosis therapy.
With Elan's cash pile now growing, Mr Martin said the notion of paying a dividend to shareholders "wasn't off the table" in the medium to long term.
However, both he and Mr Clerkin stressed that the company had taken some time to reach its current, more solid financial position, and that management were keen not to undermine that.