Elan, the Irish listed drugs company, today reported a net profit of $52.3m for the third quarter of this year, compared with a loss of $83.5m loss in the same period last year - - boosted by an exceptional gain of $107.7m from the acquisition by US healthcare giant Johnson & Johnson of part of Elan's research on the treatment of Alzheimer's disease.
The firm also raised its its outlook for the full year.
Excluding the exceptional, Elan's operating loss narrowed from $31.5m a year earlier to $1.7m.
Revenue rose 6% to $287m and day-to-day costs dipped 12%.
Elan's multiple sclerosis drug Tysabri, posted a 19% increase in global sales to $281.6m, with Elan's share of this rising 16% to $191.4m.
Revenue from the biopharmaceuticals business was up 10%, but revenue from Elan Drug Technologies - - the manufacturer, fell 3%.
Elan said it had cut its net debt from $1.5 billion at the end of June to $600m at the end of September, helped by a new bond issue.
Elan CEO
Kelly Martin said, “The third quarter of 2009 proved to be a time of significant transformation for Elan. Completion of the
Johnson & Johnson transaction and the subsequent refinancing of our balance sheet provide strategic flexibility and financial stability for the company.” He added, “We are now afforded the opportunity to focus on growing Tysabri and EDT businesses, advancing our bioneurology pipeline and investing in unique science while having fundamentally reduced business risk across the enterprise.”
Goodbody analyst Ian Hunter commented: "Elan issued a solid set of Q309 numbers this morning, reporting a 36% yoy improvement in losses per share (stripping out the $107.7m net gain on the divestment of the AIP programme) to 11.2c (we were expecting -13.4c) from a 6.3% increase in revenue to $287.0m. The top-line growth was driven primarily by Tysabri, which saw reported revenue increase by 16% to $191.4m, 2.3% behind expectations. EDT revenue slipped 3% over Q308 to $69.2m (but 2% ahead of our forecast).
On the cost side of the equation, R&D and SG&A of $80.0m and $66.6m were down 11.1% and 14.1% on Q308 and 3.4% and 8.5% lower than we were expecting, leading to a strong operating profit outturn - a loss of $1.7m versus our expectation of a $10m loss. Yesterday, Biogen Idec reported that there were 45,600 commercial patients on Tysabri as of 30 September, c.2% behind our expectations of 46,350.
Total Tysabri revenue came in at $282m, versus our expectation of $292.4m (-3.6%). Within the rest of the business, EDT reported revenue of $69.2m, 1.6% ahead of forecast with minimal variations within the business mix compared to our expectations. At first glance, the Tysabri numbers are slightly behind in both patient uptake and revenue generated. We await Elan's guidance on patient add momentum in September and October before finalising our Tysabri numbers but they will, more than likely be pulled back slightly. That said, the Q309 numbers demonstrate continued strong cost management in the existing business. In addition, our cost assumptions have yet to be fine tuned to the “new” Elan without its AIP programme, changes to which could more than offset a dip in revenue expectations."
Results detail
