Pharmaceuticals group Elan Corporation has maintained its record of strong growth with second quarter after-tax profits of $107.9 million (€116.8 million), a rise of 35 per cent.
The results were marginally ahead of expectations, but Elan shares weakened slightly in early trading in New York where most of the group's shares are traded and by midday, the shares were down $1.19 on $50.12.
Elan shares have been in heavy demand recently - buoyed by optimism about the group's Alzheimer's drug programme - and since mid-June have risen from $37 to a high of $53 before the recent profit-taking brought them back towards $50.
The driving factor behind the strong performance was a 45 per cent increase in product sales to $304.5 million from $234.4 million.
Royalties and fees for the quarter rose from $60.9 million to $83.9 million, reflecting several new licence arrangements. But research revenues fell to $33 from 1 million from $44.3 million while research and development expenditure rose 16 per cent to $65.7 million.
The second quarter results include a charge of $198.3 million, mainly as a result of the $595 million acquisition of Liposome and the charging of in-process research.
"These were a very decent set of results, with revenues $25 million higher than expected for the second quarter due to better than expected performance at the royalties and fees division," said Mr Jack Gorman, analyst at Davy Stockbrokers.
Mr Gorman, who recommends Elan as a long-term buy, believes the results will not "set fire to the share price.
To really get it moving they need to get Ziconotide and Neurobloc [the dystonia treatment which will be marketed as Myobloc] approved," he said.
Elan's chairman, Mr Donal Geaney, said the second quarter had been busy, with the receipt of approvable letters from the US Food and Drug Administration for Ziconotide and migraine treatment Frovatriptan, and the launch of epilepsy treatment Zonegran.
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/VR3765MFOBH2NMV2QNICYDF67M.png)