Elan's chairman, Dr Garo Armen, believes the company's battered share price can again retain its former heights.

Dr Armen, who took over at the helm of the ailing drugmaker after Mr Donal Geaney stepped down as chairman and chief executive in July, believes the company's ground-breaking Alzheimer's research programme could prove its saviour.

"A number of things have to fall into place, particularly Antegren and the Alzheimer's programme. If that works out, the shares could exceed the old share price," Dr Armen told The Irish Times.

He said he believed Elan had "the best Alzheimer's research programme" in the world, with the possibility of introducing break-through treatments.

Its grand plan to become one of the world's large pharmaceutical players having come a cropper, the company has defined a zone, ranging from a small to a medium-sized biopharmaceutical company, where it is happy to be.

To get there, however, it must first complete a radical restructuring and cost-cutting programme, involving raising $1.5 billion (€1.53 million) through asset disposals by the end of next year.

However, Dr Armen said that with the exception of one financial asset, which the company must sell soon, the process could not be characterised as " a fire sale".

"We are getting unsolicited interest which has been high enough to give us encouragement that the process is going to go well," Dr Armen said.

Fears that the restructuring could lead to Elan's complete departure from the Republic, where the company is cutting around 300 jobs out of a workforce of 900, also look unlikely to be realised.

Dr Armen said the cash-strapped company was prepared to sell its Athlone facility only if it were offered "a very high price".

"If someone offers $500 million for it, it will be theirs," he said. But he said it was probable the company would keep its Irish base and use it for manufacturing.

"The odds are we will not sell the Athlone facility. It is reasonable to expect Elan will continue to have an Irish presence to perpetuity," he said.

Facing an SEC inquiry and class action law suits, the company hired an external law firm to conduct an investigation into the company but found no evidence of impropriety.

But although there was no wrongdoing, Dr Armen conceded that Elan's accounting practises had gone right to the line in terms of accepted practice, only to find the line had shifted in the wake of the Enron scandal. "They found themselves on the wrong side of it," he said.

The real problem then lay in the company's inability to cope with the extent of its share price fall, which meant it could no longer repurchase financial instruments with its own paper.

"The downfall of this company was really the fact that there was no contingency plan to deal with the potential unwinding of what was on the balance sheet if the stock dropped from $60 to $2," he said, adding that the company's emergency plan had envisaged no more than a halving of the share price.

Elan shares closed 10 cents lower at €2.20 in Dublin.