Elan has named a senior US banker as chief executive as the Irish-based pharmaceuticals group looks to sell off units to fund a recovery plan. Mr G Kelly Martin will take over as president and chief executive on February 3rd. Mr Kelly (43) was senior vice-president at Merrill Lynch in charge of international private clients until the start of December.
His appointment was broadly welcomed by the market although there were some reservations over his lack of experience in the pharmaceutical industry.
Mr Kelly said yesterday: "If you look at this company, you need to be able to marry world-class science with world-class business management and what I would hope to bring to the party fairly quickly is an ability from a business point of view."
Analysts say Mr Kelly, though little known in Ireland, is highly regarded on Wall Street. His appointment is seen as confirming the primacy of the financial restructuring over the scientific side of the business. Goodbody analyst Mr Ian Hunter said Mr Martin had been hired for his "known ability in business 'pruning' and the turnaround in Merrills".
The move is also seen as a further downgrading of the status of the Irish operation. The company has been based in headquarters in Ireland since it was founded by Mr Don Panoz in 1969. However, under the restructuring orchestrated by current chairman and chief executive Dr Garo Armen, the company has increasingly based itself in San Diego, where Elan has a research facility. Mr Martin said he would be based on the US west coast.
Mr Martin resigned from Merrill Lynch at the beginning of December after the incoming chief executive Mr Stanley O'Neal decided to merge his unit with the firm's main brokerage business.
That resignation came just five months after Mr Martin had defended the company over allegations of impropriety in its dealings with Enron. Mr Martin had been a senior manager of Merrill's investment banking unit when it arranged some unusual transactions for Enron.
Mr Martin, appearing after two colleagues refused to testify, told senators: "Had we known at the time what we know today, we would not have conducted business with Enron." However, he insisted that "at no time did we engage in transactions that we thought were improper".
Ironically, it was the collapse of Enron and the subsequent shift in perception of accounting standards that led to Elan imploding.
Mr Martin's first job will be completing the $1.5 billion (€1.4 billion) asset disposal programme on schedule and bringing the SEC investigation into the company to resolution. If successful, it would put the company in a position to address the $1 billion convertible loan due at the end of the year.
The announcement of Mr Martin's appointment came after the close of US business on Monday. Elan shares rose in Dublin yesterday on the news, finishing 7 per cent ahead at €2.95. In New York, the shares closed up 3.4 per cent at $2.99.
