For the full year, the $1 billion sales represented a 48 per cent increase on 1998, with pre-tax profits rising from $257 million to $358 million, although below the line, Elan has taken a $88.6 million charge on the write-off of acquired research following the acquisition of Axogen.
But analysts tend to look more to the quarterly results when assessing Elan. While earnings per share of 37 cents were ahead of the consensus forecast of 35 cents, analyst Mr Philip Molloy of ABN-AMRO said this was largely due to interest income of $22 million compared to less than $6 million in the fourth quarter of 1998. "Exclude that, and earnings would probably be below the 35 cents forecast," he said.
Sales at pharmaceutical group Elan Corporation have exceeded $1 billion (€1.02 billion) for the first time, two years ahead of the group's previous target, the year 2001, for breaching that barrier.
But while Elan's fourth-quarter and full-year 1999 results came in ahead of forecasts, the distorting effect of a big increase in fourth-quarter interest income and lingering uncertainty over FDA approvals for four products developed by Elan meant that there was a muted response in the market.
For the full year, the $1 billion sales represented a 48 per cent increase on 1998, with pre-tax profits rising from $257 million to $358 million, although, below the line, Elan has taken a $88.6 million charge on the write-off of acquired research following the acquisition of Axogen.
But analysts tend to look more to the quarterly results when assessing Elan. While earnings per share of 37 cents were ahead of the consensus forecast of 35 cents, analyst Mr Philip Molloy of ABN-Amro said this was largely due to interest income of $22 million compared to less than $6 million in the fourth quarter of 1998. "Exclude that, and earnings would probably be below the 35 cents forecast," he said.
Mr Molloy also referred to the fall in Elan's fourth-quarter margins to 60 per cent, compared to around 63 per cent in the first two quarters and 59 per cent in the third quarter.
Elan chief financial officer Mr Tom Lynch said the lower margins in the fourth quarter were due mainly to a higher proportion of sales coming from the lower-margin drug delivery business than from the higher-margin pharmaceutical manufacturing business.
Mr Lynch said that Elan had set itself a target of $2 billion sales by 2003. How swiftly Elan moves towards this target will largely depend on how quickly it gets FDA approvals for the four drugs for which it has lodged applications. These applications are for Ziconitide pain treatment, Neurobloc dystonia treatment, Zonegran epilepsy treatment and Frovatriptan migraine treatment.
Mr Lynch said Elan expects to hear from the FDA on Zonegran in the current quarter, Neurobloc in the next few months and Ziconitide later in the year. Assuming that Elan gets the go-ahead for Ziconitide, the group intends to introduce it to the market in the third quarter.
