Elan 'on track' to break even in 2005

Elan has reported steady progress for the second quarter of the year and said it remained on track to break even in 2005.

The pharmaceutical firm posted a 65 per cent drop in sales for the three months to the end of June, but most of the drop was linked to products that have been sold over the past year.

When these products were excluded from the numbers, sales actually rose by 3 per cent to $42 million (€35 million).

Exceptional costs related to the firm's recovery plan and investments depressed the figures, however. Pre-tax losses rose to $118 million over the quarter, compared to a profit of $17 million for the same months of last year.

Elan chief executive, Mr Kelly Martin, said that if the firm managed to keep to its projected timelines over the next year or so, it should move into profit in 2006.

He said the company was continuing to "focus and align resources on the commercialisation" of its flagship drug, Antegren.

Shares in the company, which have been highly volatile of late, closed 76 cents weaker at €16.14.

Elan owns Antegren jointly with US pharmaceutical firm, Biogen.

The drug is being developed for the treatment of multiple sclerosis (MS), Crohn's disease and rheumatoid arthritis.

Elan expects to discuss a filing on Antegren for Crohn's with US regulators over the next month.

It has already been granted "fast-track" status for its filing for MS, and began an advanced trial on rheumatoid arthritis over the second quarter.

Analysts have estimated the global market for the drug could be worth about $4 billion by 2008 in the MS market alone.

Mr Martin dismissed suggestions made by rival pharmaceutical firm, Pfizer, that Antegren for MS could be "tempered by a lack of long-term safety" as competitive talk . "Antegren changes the game," said Mr Martin.

Elan had cash of $677 million on its balance sheet at the end of June, compared to $910 million at the end of March.

Mr Martin said the company had retained an "appropriate" level of liquidity but would probably look at a debt financing towards the end of the year.

Referring to the Securities and Exchange Commission investigation that continues to hang over the firm, he said it was still "reasonable" to hope that the matter would be settled before the end of September.