Elan 'can progress' without drug
Irish biotech group Elan said today it can progress with or without its biggest new drug hope after it failed to prove effective in the first of four high-stakes late-stage trials, battering the company's shares in the process.
Elan had described key data on Bapineuzumab, an Alzheimer's drug in which it has a 25 per cent stake, as "potentially transformational" for the company, with a successful outcome possibly even leading to it receiving a lucrative takeover bid.
However Pfizer, which develops the drug with Johnson & Johnson, said on Monday it failed to improve cognitive and life function, the primary goals of the trial, toppling Elan's stock from a near four-year high.
"We built this company to move forward with or without Bapineuzumab," outgoing chief executive Kelly Martin told journalists on a conference call after the company posted slower-than-expected second quarter revenue growth.
"We can't control short term movements in our stock up or down, the only thing we can do is focus on the fundamentals of the business and we've strengthened the capital structure, the balance sheet, there's good revenue growth and there's good progress in our science."
"The underlying fundamentals, value and projections of the business as is remain positive and consistent frankly with performances over the last few quarters."
Shares in Elan, which closed 11 per cent lower yesterday, were down a further 2.2 per cent earlier today. Elan, which discovered the drug, did not have to contribute to the $500 million invested in it since 2009 after selling a 25 per cent stake to J&J.
Its funding commitments resumed in the second quarter, however, when it spent $48.7 million, the first chunk of a maximum $200 million outlay.
Analysts at RBC Capital Markets said in a note they saw the most likely scenario for Elan being the failure of Bapineuzumab, prompting it to monetize its stake and then sell its 50 per cent share in blockbuster multiple sclerosis drug Tysabri to partner Biogen Idec, into which it would then consolidate.