Shares in Irish drugs company Elan slumped 24 per cent to €26.00 at 13.42 p.m. after it warned revenue growth in 2002 would be slower than expected due to delays in launching new products.
The stock, which was already 50 per cent below its year high, has been hammered recently by concerns over the company's accounting practices.
The company said earnings per share for the final quarter of 2001 were $0.56, in line with consensus estimates, while total revenues were $487.6 million, against $424.4 million for the fourth quarter of 2000. Full-year revenues for 2001 were a record $1.9 billion, up 22 per cent.
But in its guidance for 2002 the company warned earnings would be "affected by slower than anticipated growth in total revenue". It predicted 2002 EPS of $1.55 to $1.65 on revenues of $2 to $2.1 billion, versus a First Call 2002 estimated EPS of $2.35.
Elan blamed "later introduction of new products, the revenue contribution in 2001 from the product rationalisation programme and certain costs that will be incurred in 2002 required to position its pharmaceutical business for future growth".
The company also said that "in light of current market concerns relating to off-balance sheet arrangements", it was providing information about two "qualified special purpose entities" (QSPE), which it said were not consolidated in its final results as presented under US accounting principles.
The company said it expected 2002 revenues would be in the $2 billion-$2.1 billion range, of which product revenue should account for $1.6 billion-$1.7 billion. The company said it expected earnings per share in 2002 to be between $1.55 and $1.65, compared with $1.91 for 2001.
In an update of forthcoming products, Elan said it planned to launch the long-awaited migraine drug Frova, developed with British biotech firm Vernalis Group, in April.