Elan said yesterday that sales of multiple sclerosis treatment Tysabri had exceeded expectations since its launch, making the company optimistic that it would return to profitability next year.
Reporting a fourth quarter loss of $0.22 (€0.17) per share, against $0.82 a year earlier, Elan said that, in the nine weeks following Tysabri's end-November launch, upwards of 3,000 patients were taking the drug, with a multiple of that number awaiting treatment.
"The initial uptake has gone very well. The medical community interest has been very broad and very deep," Elan chief executive Mr Kelly Martin said. "Given the holiday season and the newness of the product, it has certainly exceeded our expectations."
The drug has been prescribed by some 2,000 neurologists, about one-third of those targeted by Elan and its partner in the development of Tysabri, Biogen Idec. Sales from the product in 2004 came to $6.4 million (€5 million).
The company is expecting to hear back from European regulatory authorities on its application for approval of Tysabri in treating multiple sclerosis and Crohn's disease towards the end of this year. If it gets the green light, the drug is set for a European launch in the first quarter of 2006.
Elan launched its chronic pain treatment, Prialt, in the US 10 days ago. Mr Martin described Prialt as a product likely to deliver "slow and steady progress". The company is continuing work on its Alzheimer's programme, and expects to be in phase 2 trials by the end of March. It has two or three other programmes in the auto-immune and neurodegenerative categories which remain at the pre-clinical stage, but which it hopes to move out of the laboratory by the end of the year. Elan expects its remaining business, including its hospital drugs, drug delivery and nanotechnology business, to continue to perform strongly, helping it to return to profitability by the end of 2006.
Mr Martin believes the company can combine double-digit sales growth with flat costs in the rest of its business, while exploiting the opportunity open to Tysabri. Excluding Tysabri, the company expects to grow revenues at a rate of 15-20 per cent to $460-$490 million in the current year, and intends to hold sales, general and administration costs at the 2004 level of around $295 million. Spending on Tysabri this year, including pre-launch costs for the European market, is expected to be $160-$180 million, above analysts expectations.
Shares in Elan fell 2.96 per cent to $27.52 in New York, their main market, and were down by 49 cent or 2 per cent to €21.55 in Dublin, reflecting some concern over the pre-launch costs.
Elan expects to report negative EBITDA (earnings before interest, tax, depreciation and amortisation), excluding revenues and costs related to Tysabri, in the $160 million to $180 million range. It reported total revenue of $123.8 million in the fourth quarter, down from $138.2 million in the same period of 2003, reflecting a significant asset disposal programme. However, revenue from retained products was up by 29 per cent to $91.8 million.
Elan reported a fourth-quarter EBITDA loss of $82.5 million, or $205.4 million for the full year, against $31.7 million in the fourth quarter of 2003, and $179.3 million for 2003 as a whole.
