Irish drugs firm Elan today reported its revenues rose by 14% to $526 million in the second quarter of the year due to a 30% rise in income from MS drug Tysabri, which is used to treat multiple sclerosis and Crohn's disease, and a 10% increase in revenues from Elan Drug Technologies. Operating losses dropped by 54% from $36 million to $16.5 million, with pre-tax losses also down to $52.3 million, from €69 million in the same period in 2008.
The firm's operating loss for the first half of the year fell by over $10 million from $81.6 million to $71.3 million. The net pre-tax loss for the same period was just under $141 million, compared to $152 million at the same point last year.
In early July, Elan announced that US healthcare firm Johnson & Johnson had agreed to buy an 18.4% stake in the company as part of a deal under which it will take over some of Elan's research into the treatment of Alzheimer's disease.
Elan has also announced it plans to de-list from the London Stock Exchange due to low volumes but retain its primary Dublin listing and its listing on the New York Stock Exchange.
Elan executive vice president and chief financial officer, Shane Cooke said:"We are particularly pleased to see that the initiatives implemented earlier in the year resulted in an acceleration of the growth in Tysabri, with a 55% increase in the number of net patients added compared to the first quarter 2009."
Results detail
Goodbody analyst Ian Hunter commented: "Costs came in 6% lower than forecast. Last week, Biogen Idec reported that by the end of Q209 there were c.42,700 commercial patients on Tysabri generating total worldwide Tysabri revenue of $255m. Overall patient numbers were in line with our and the market’s expectations, which were tracking at 42,600 and 42,500, respectively. However, there was a geographic imbalance in that up tick. Over the three month period, the net number of new patients on Tysabri increased by 1,200 (92 per week) in the US, but by 2,200 (169 per week) in the rest of the world. We await clarification from Elan on this difference and whether or not there might be a pull back in Europe over the summer period.
As part of the deal announced with J&J, Elan will probably not have to fund further development of Bapineuzumab or the other drugs in the Alzheimer’s Immunotherapy Programme. We have reduced Elan’s R&D budget by $500m over the coming three years to reflect this element of the deal, but await company guidance on actual R&D spend over the coming few years. At first glance, although the revenue line was 4% ahead of expectations and the costs 6% lower over the quarter than forecast, the main influence on the model over the coming two quarters will be the impact of the J&J deal on the R&D cost base. We incorporated cutbacks into our model at the time of the deal but await management guidance on actual R&D and SG&A spend through the rest of FY09 and into FY10 before finalising our numbers."
