Rise in Tysabri sales boosts Elan

Increasing sales for its key multiple sclerosis drug Tysabri helped Elan to narrow its losses in the third quarter and the company said it was confident of beating its full-year guidance.

While losses of $87.4 million were 25 per cent lower than the corresponding period, they were still slightly ahead of analyst forecasts.

Produce revenue jumped 43 per cent to $176.6 million in the three months to the end of September compared with $112.5 million in the same period a year ago. Tysabri generated $63.5 million for Elan, compared with $5.4 million a year earlier, when the drug came back on the market after being suspended because of a link to a rare, fatal brain infection.

Goodbody analyst Ian Hunter described the figures as "solid", although sales of Tysabri are still behind his projections.

The company said 17,000 patients are now taking the MS treatment, ahead of the 15,000 level that is seen as the break-even point.

"The improved performance was driven by the acceleration of Tysabri revenues and improved operating margins," chief financial officer Shane Cooke said on a conference call. "Revenues are increasing at a much faster pace than operating costs."

He added: "We're optimistic that we will beat the company's forecast for losses before tax and other items of about $50 million for the full year."

Lars Ekman, the group's head of research, confirmed progress in the company's core research programme which is chasing a treatment for Alzheimer's disease.

Elan intends to commence phase III trials on one of its Alzheimer's programmes - AAB001 - by the end of the year.

"These are some promising compounds in the Alzheimer's pipeline that are below the radar," Goodbody's Dr Hunter said. "The market was looking for some positives in this area."

Analysts at Davy agreed that Elan's Alzheimer's pipeline would be the catalyst for driving up the company's shares. They said a key point would come in the middle of next year, when a set of Alzheimer's drug trial results are due. - (Additional reporting, Bloomberg)