Elan Reports Second Quarter 2009 Financial Results

DUBLIN--(BUSINESS WIRE)--Jul 21, 2009 - Elan Corporation, plc today reported its second quarter 2009 financial results.

Elan CEO Kelly Martin said, “During the first six months of 2009, we grew revenues, added an additional approach to Alzheimer's disease and successfully completed our strategic review with the announcement of a transformative transaction with Johnson & Johnson. Our focus will remain squarely on a disciplined and continuous investment in science and advancing our diversified clinical portfolio to patients.”

Commenting on the second quarter results, Elan executive vice president and chief financial officer, Shane Cooke said that the company results reflected the strong performance of both the Biopharmaceuticals business and Elan Drug Technologies (EDT). Revenues were up by 14%, led by a 30% increase in revenues from Tysabri and a 10% increase in revenues from EDT. The increase in revenues combined with lower SG&A costs led to the company reporting a 54% reduction in operating losses and almost $20 million in positive Adjusted EBITDA for the quarter. “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.”

Mr. Cooke added, “We were also delighted to announce earlier this month that we had entered a definitive agreement with Johnson & Johnson which marks the end of the strategic review that had started in January. The completion of this transaction will give us financial resources and access to commercial infrastructure which will enable the acceleration of the development and commercialization of our pipeline and product portfolio, while allowing our existing shareholders to continue to participate in the resulting potential long term value creation. Consistent with our stated objectives, it will also de-risk our balance sheet, reduce our future costs and accelerate our return to profitability. For the full year 2009, we remain on target to record double-digit revenue growth and to be profitable on an Adjusted EBITDA basis.”

To supplement its consolidated financial statements presented on a U.S. GAAP basis, Elan provides readers with EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) and Adjusted EBITDA, non-GAAP measures of operating results. EBITDA is defined as net income or loss plus or minus depreciation and amortization of costs and revenues, provisions for income tax and net interest expense. Adjusted EBITDA is defined as EBITDA plus or minus share-based compensation, other net charges, and net investment gains or losses. EBITDA and Adjusted EBITDA are not presented as, and should not be considered alternative measures of, operating results or cash flows from operations, as determined in accordance with U.S. GAAP. Elan's management uses EBITDA and Adjusted EBITDA to evaluate the operating performance of Elan and its business and these measures are among the factors considered as a basis for Elan's planning and forecasting for future periods. Elan believes EBITDA and Adjusted EBITDA are measures of performance used by some investors, equity analysts and others to make informed investment decisions. EBITDA and Adjusted EBITDA are used as analytical indicators of income generated to service debt and to fund capital expenditures. EBITDA and Adjusted EBITDA do not give effect to cash used for interest payments related to debt service requirements and do not reflect funds available for investment in the business of Elan or for other discretionary purposes. EBITDA and Adjusted EBITDA, as defined by Elan and presented in this press release, may not be comparable to similarly titled measures reported by other companies. Reconciliations of EBITDA and Adjusted EBITDA to net loss from continuing operations are set out in the tables above titled, “Non-GAAP Financial Information Reconciliation Schedule.”

¹⁾ Elan's debt covenants do not require it to maintain or adhere to any specific financial ratios. Consequently, the shareholders' deficit has no impact on Elan's ability to comply with its debt covenants.

Posted: July 2009

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