Shares in Elan recovered some ground on Wall Street yesterday, after earlier losing more than 15 per cent of their value in Dublin, as the company assured investors that it was not in any danger of a cash crunch.

After losing almost 21 per cent of its value in New York on Thursday, the pharmaceutical stock gained 16.4 per cent, or $1.13, to close at $8.02.

In Dublin, it bounced back in the afternoon to close at €8.00, a loss of 10 per cent on the day.

The sell-off followed the release of a Credit Suisse First Boston (CSFB) research note questioning the value of the company's earnings and cash situation.

Elan insisted yesterday that it had ample resources to meet all its obligations.

A company spokesman describing the fall in the share price "as a lemming-like response to a single analyst note".

Chairman and chief executive Mr Donal Geaney said the company had cash balances of $1.4 billion (€1.5 billion) at the end of the first quarter.

If other marketable securities are included, this figure rises to more than €2 billion, the company said, while Elan also holds investments in a number of public and private companies.

Mr Geaney insisted there was no question of Elan not making its debt repayments, one of which requires $160 million to be paid at the end of June.

Analysts also said they did not believe Elan was facing a liquidity crisis and that it could meet its debt paydown schedule.

"They should have enough cash to pay down their debt through to 2005," one Dublin analyst said.

But he warned that meeting its debt obligations might hinder the company's acquisition growth and joint-venture developments.

Concern about the company's liquidity was sparked after it moved to register shares in a number of companies in which it has investments.

The decision to register the shares with the US Securities and Exchange Commission (SEC) was seen by analysts as a prelude to their sale.

But Elan said it was registering them as part of its normal investment management activities and registration did not necessarily imply an immediate intent to dispose of such securities.

"It gives us the flexibility to move," according to an Elan spokesman. "I would expect to see more registrations moving forward."

Drug developer Ligand, in which Elan holds a 21 per cent stake, confirmed that it had received a request from Elan to register its shares.

The Nasdaq-listed stock, seen by analysts as one of the star performers in Elan's portfolio, fell on the news although Ligand said it was in ongoing discussions with Elan to minimise the potential market impact.

Meanwhile, some analysts said the share price fall may have been overdone. In a research note, company broker Davy said the stock looked oversold at current levels, while Goodbody Stockbrokers analyst Mr Ian Hunter said the market had over-reacted to the CSFB report.

"We'll have to wait and see what guidance the company gives us when their next set of results come out next month," he said.

However, some analysts remain worried about Elan's two off-balance sheet vehicles, which include dozens of the firm's investments in biotech companies.

They are concerned that the carrying cost of Elan's investments may be higher than their current market value, which could force the company to make significant writedowns.

Separately, Elan said yesterday that Ms Anne Geaney, wife of the chairman and chief executive, spent $87,430 buying 10,000 shares in the company at a price of $8.743 per share on June 6th.