Elan loss narrows on rising Tysabri revenue

Drug firm Elan has halved its second-quarter loss and reaffirmed its patient target for its multiple sclerosis drug Tysabri.

The Dublin-based company said its net loss for the second quarter fell 49 per cent to $71.5 million, (€45.6 million) or 15 cents a shares from $141.1 million in the same period last year.

Revenues grew 30 per cent to $245.6 million in the quarter, boosted by strong Tysabri sales. Elan reiterated today its confidence that revenues for the year would approach $1 billion.

Elan shares sales of Tysabri with Biogen and said the drug brought in $200 million in revenues in the quarter.

Earlier this week the two companies announced there were 31,800 patients taking the drug worldwide at the end of June. They have set a target of 100,000 patients on the medicine by 2010.

Shane Cook, Elan vice president and chief financial officer said the reduction in losses for the second quarter was due to strong Tysabri sales and strong cost management in sales and administration.

This had more than off-set a reduction in sale of its drug Maxipime due to generic competition, he said.

"We remain on track to record adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) losses of less than $50 million for the year and to exit the year profitable on an adjusted EBITDA basis," Mr Cooke said.

While revenues from the biopharmaceuticals business grew by 62 per cent to $173.8 million, Elan Drug Technologies (EDT) reported a 12 per cent fall in sales to $71.8 million. .

The company said it has decided to explore splitting these two businesses and said an evaluation of the options available "will be completed over the next few months".

Research and development expenses increased 36 per cent to $81.2 million in the quarter, up from $59.7 million in the second quarter 2007, primarily due to the advancement of its Alzheimer's disease programmes.

Next week Elan plans to publish phase three trial data for its Alzheimer's drug Bapineuzumb or AAB-001 which it is developing with Wyeth.

Davy analyst Jack Gorman said revenue growth was "modestly below forecast due to lower revenues from the EDT division" but said he did not expect to make "material changes to full-year forecasts".

Earlier this week Biogen reported an 11 per cent rise in second-quarter profits on higher sales of Tysabri. The company also raised its 2008 forecast.

Net income climbed to $207 million, or 70 cents a share, from $186.1 million, or 54 cents, a year earlier, the company said. Revenue rose 28 per cent to $993.4 million as more doctors prescribed Tysabri.

At 10.15am Elan shares were trading down 3.2 per cent at €21.39 on the Iseq giving it a market cap of €10.1 billion.