Shares in pharmaceutical group Elan Corporation, the biggest Irish public company, fell by 11 per cent in early trading on the New York Stock Exchange yesterday, prompting the group to issue a statement saying that it is comfortable with current third-quarter and full-year earnings forecasts.

In a statement clearly aimed at reassuring the market that all is well, Elan also stated that all its development programmes and new product introductions are on track. At its low point yesterday, the shares were down 17 per cent on their Monday opening level. But the positive tone to the trading statement seemed to reassure the market and Elan shares were trading late last night at $44.70, down 7.84 per cent.

In earlier trading in Dublin, Elan shares fell by €6.66 to €48.00. But the vast bulk of Elan stock is held by American investors and most of the trading in the shares takes place on the NYSE. More than 3 million Elan shares had traded by midday in New York and the shares were trading at under $43, a fall of $5.70.

Dealers in Dublin found it difficult to explain the heavy sell-off in Elan shares as pharmaceutical stocks are traditionally seen as secure defensive investments in times of market turmoil.