Elan reported its first operating profit since 2001, but net losses still rose in 2010 due to a settlement reached with the US government over an investigation involving the marketing of its epilepsy drug Zonegran.

Revenues at the firm rose by 5 per cent to $1.2 billion, with Tysabri revenues up 18 per cent. Operating expenses fell 9 per cent, before other charges and gains.

Adjusted earnings before interest, tax, depreciation and amortisation rose 73 per cent to $166.5 million. The company cut its total debt by 17 per cent in 2010.

However, losses widened to $324.7 million for the year as the company recorded a settlement reserve charge of $206.3 million over problems with the marketing of its Zonegran epilepsy drug. Elan was accused of marketing the drug for therapies other than those approved by the US food and drug administration.

“2010 was a year of tangible advancement for Elan with demonstrated progress in both the BioNeurology and EDT businesses,” Elan chief executive Kelly Martin said.

“Revenue growth combined with prudent and disciplined cost management enabled us to achieve our goal of operating profitability before other charges and gains. This, combined with a further de-leveraging of the balance sheet provided enhanced operating leverage from an overall performance point of view.”

The company said it would focus on improving its operating performance in 2011, and invest in developing science and therapeutics.

For the coming year, Elan forecast adjusted Ebidta of about $200 million, driven by a pick-up in the growth of revenues and reduced operating expenses.

Shares in the company rose 2.3 per cent to €5.18 this afternoon on the Dublin market.