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Irish Drugmaker Elan Slumps to Q4 Loss

From Associated Press (February 10, 2010)

DUBLIN -- Elan Corp. PLC said Wednesday it slumped to a loss in the fourth quarter, but the Irish drugmaker forecast a 2010 rebound as sales for its key multiple sclerosis-fighting drug, Tysabri, continue to grow.

The Dublin-based company said its net loss in the October-December quarter was $57.7 million ((EURO)79.5 million), compared to a $169.5 million profit in the final quarter of 2008.

However, last year's income was unusually boosted by a $234 million tax refund, while this year's suffered from a $24.4 million charge to refinance debts due in 2011. Setting aside those exceptionals, Elan's fourth-quarter loss was halved from a year earlier.

Elan said it expects to record a healthy operating profit in 2010 driven by growth in sales of Tysabri, a product that Elan markets and distributes in cooperation with U.S. drugmaker Biogen Idec Inc. Tysabri is an industry-leading suppressor of the paralyzing and crippling effects of multiple sclerosis, an incurable disease of the central nervous system.

American and European regulators permit Tysabri to be used as treatment only in the most severe MS cases, because the drug has been linked to a risk of developing a rare, often fatal brain-inflammation disease called PML.

Elan's fourth-quarter sales rose 11.2 percent to $300 million, reflecting a 37 percent growth in Tysabri sales in its key U.S. and European markets.

The big change for Elan over the past year was its $885 million sale of shares and assets to Johnson & Johnson in September. The New Brunswick, N.J.-based healthcare giant received an 18.4 percent stake in Elan, becoming its largest shareholder, and acquired the rights to the Irish company's promising but expensive research into the incurable brain-destroying disease Alzheimer's.

Elan's fourth-quarter operating expenses fell 10.9 percent to $149.2 million, chiefly because of a 36 percent decline in research and development expenses following the sale of its Alzheimer's research projects to J&J.

Elan said the J&J cash allowed it to slash its net debt by 53 percent to $700 million and refinance the remaining liabilities, admittedly at higher interest rates, but with full repayment not due until 2016.

Elan shares rose 1 percent to (EURO)5.16 on the Irish Stock Exchange.

Posted: February 2010