Elan losses widen on supply problem

Supply problems with antibiotic Maxipime and higher R&D costs associated with a new Alzheimer's treatment programme led to increased losses at Irish biotech company Elan in the third quarter.

However, data for the roll-out of the company's multiple sclerosis drug Tysabri was of more interest to analysts. This was, if anything, ahead of expectations.

The company said it was pleased with the relaunch of the drug after a suspension related to safety concerns.

Elan expects sales of its key drug to accelerate quickly. "We will see revenues pick up very quickly in this quarter versus the last quarter," Elan chief financial officer Shane Cooke told a conference call.

Chief executive Kelly Martin said the company was very encouraged that 75 per cent of patients opting to take Tysabri had switched from rival treatments.

The company also said it would file an application with US regulators before the end of the year to use Tysabri to treat Crohn's Disease.

Mr Cooke said Elan was pleased with the overall outcome for the third quarter, and he raised guidance for the full year.

The company reported net losses of $117 million in the three months to the end of September, compared with $67.1 million in the same period last year. Over the first nine months of 2006, however, losses have fallen 26 per cent to $240.8 million.

Revenues of $123.3 million were slightly down on the $128.6 million in the year ago period, largely due to a 22 per cent fall in sales of Maxipime due to problems at an outside supplier.

Tysabri apart, Mr Cooke said the company was confident of recording revenues in excess of $500 million for the full year, with losses now expected to be lower than previous guidance.