Shareholder row overshadows top Elan results
THE latest shareholder spat at Elan has overshadowed the fact that the Irish-based pharmaceutical firm virtually broke even in the second quarter of this year.
When a once-off $206m (€160.5m) charge, mainly related to the Zonegran drug divested by Elan in 2004 is stripped out, Elan recorded an operating (pre-interest) loss of just $3m (Elan reports its results in US dollars). However, despite virtually eliminating its losses, the Elan share price barely budged on the announcement of the results. Just for good measure, dissident shareholder Ib Sonderby has launched a campaign to shake up the company's board, accusing Elan of "ineptitude and mismanagement". Given the volatility of its share price over the years, dissident shareholders are the least of Elan's worries. Elan claims to have already addressed many of Sonderby's concerns and claims that on other matters he is "seriously misinformed".
Of far greater concern to Elan is that despite stemming the flow of losses, which on more than one occasion have threatened the company's very existence, the share price remains in the doldrums. Having briefly touched €6 in mid-April it had fallen back to just €3.86 by yesterday. At that price the company is valued at just €2.2bn. Unless chief executive Kelly Martin can get the Elan share price back up, Sonderby won't be the only irate shareholder.