Elan Reports Narrowing 2nd-Quarter Loss, Predicts Profit on Resumed Sales of MS Drug

-- Drug maker Elan Corp. PLC reported a smaller second-quarter loss Tuesday and predicted it would return to profit soon because of the burgeoning sales of multiple sclerosis drug Tysabri.

Elan, which pins its hopes for a rebound principally on Tysabri, said its net loss in the quarter ending June 30 fell 37 percent to $90.5 million from $142.6 million in the second quarter of 2005. Sales rose 15 percent to $136.4 million from $118.6 million.

Analysts said the decision by regulators in the United States and Europe to permit some MS sufferers to use Tysabri should enable Elan to return to profit, possibly next year, for the first time since 2002.

Shane Cooke, Elan's executive vice president and chief financial officer, said Tysabri was already on sale in Germany, Ireland, Sweden, the United Kingdom and the United States, but would take between six and 12 months to reach the market throughout the 25-nation European Union.

Elan CEO Kelly Martin told a news conference that the company was "very pleased with what we have seen in the first few weeks" of Tysabri sales. But he said Elan wouldn't announce any sales figures until the third-quarter results.

Elan jointly developed Tysabri with Biogen Idec Inc., of Cambridge, Mass., to prevent relapses in sufferers of MS, an incurable neurological disorder that can cause sudden, partial paralysis. Clinical trials indicated that the drug was far more effective in suppressing MS symptoms than traditional interferon treatments. Elan and Biogen Idec say the annual cost of Tysabri -- which is administrated every four weeks by intravenous infusion -- exceeds $28,000.

"With the approval of Tysabri and the improvements we have made to the business, we are now entering into a new and exciting phase in the development of Elan. We are confident that revenues from Tysabri will drive our return to profitability," Cooke said.

Investors appeared to disagree, driving Elan shares 0.3 percent lower, to close at 11.69 euros ($14.92) on the Irish Stock Exchange.

Goodbody Stockbrokers in Dublin said it remained confident that Tysabri would achieve $2.2 billion in worldwide annual sales by 2009.

The U.S. Food and Drug Administration initially approved Tysabri in November 2004, but Elan and Biogen Idec pulled the drug from the U.S. market three months later, after three people taking it in clinical trials contracted a rare brain disease called PML; two died from the usually fatal condition.

In June, the FDA approved resumed sales after no new PML cases were detected among more than 5,000 other clinical trial patients. European regulators gave their approval this month.

More than 400,000 people suffer from MS in the European Union, about 350,000 in the United States.

But regulators on both continents said MS patients shouldn't be permitted to use Tysabri unless their condition was not improving using longer-established drugs, or were suffering exceptionally life-threatening effects.

Elan's president of research and development, Lars Ekman, said the company also expected to gain approval next year to provide Tysabri to sufferers of Crohn's disease, an intestinal disorder, initially in the European Union.

The Dublin-based company was once an investor's favorite because of its headline-making efforts to cure Alzheimer's disease. But Elan suffered a near-fatal fall in 2002 on bad news.

First, trials of its Alzheimer's drug were abandoned after patients developed potentially fatal brain inflammations. Then, after a two-year U.S. Securities and Exchange Commission investigation into accounting malpractice, the company drastically restated its books -- falling deep into the red for the first time and shocking investors. Elan since has undergone substantial restructuring to cope with more than $2 billion in debt.