Investor warns of uncertain future for Elan
IRISH drug company Elan faces being acquired by a competitor within two years at a knockdown price unless its chief executive is replaced and a new strategy is developed, a Danish investor in the firm has warned.
Ib Sonderby, who directly owns 300,000 Elan shares and is on the boards of firms that control a further two million of the stock, made the comments as Elan yesterday reported a net loss of $213.1m (€165m) for the quarter to the end of June. This compares with a loss of $68.2m (€53m) in the second quarter of 2009.
Elan made a provision to pay a $204m (€158m) fine that it was hit with last week in the US for its inappropriate marketing of an epilepsy treatment that it previously owned.
Elan's drug revenue, rose 5.3pc to $212.9m (€165m). Nevertheless, overall revenue fell by more than 4pc to $268.9m (€208.5m).
On the basis of adjusted earnings before interest, tax, depreciation and amortisation, Elan's profit climbed by slightly less than 10pc to $21m (€16.3m)-- below analyst expectations.
In an open letter to Elan board directors, including chief executive Kelly Martin, Ib Sonderby claimed that the drug firm had now reached a "desperate crossroads".
He said there had been an "incomprehensible unwillingness to monitor the office of the chief executive" and maintained that the current Elan leadership had "used its tenure to destroy shareholder value".
Speaking to the Irish Independent, Mr Sonderby said Elan could be snapped up at a deep discount by a larger player and that a CEO with strong pharma experience was needed.
A spokesperson for Elan dismissed Mr Sonderby's allegations against the board, saying that many of the matters raised by him had been previously addressed and that he was "seriously misinformed" on others.
Mr Martin last month signalled that he would step down in 2012. Shares in the company closed down more than 3pc, or 12 cent in Dublin, at €3.76.