Elan says looking at all options to raise cash

 

Pharmaceutical company Elan said “everything is on the table” in its discussions to raise cash for the company, including a possible sale of its partnerships with Biogen and Wyeth.

Elan is in talks with Biogen “on a daily basis,” chief financial officer Shane Cook said on a conference call with reporters today.

He declined to comment further on specific discussions about the sale of its stake in multiple sclerosis drug Tysabri. The Financial Timesreported yesterday that the company is in talks with large drugmakers to possibly sell a 19 per cent stake in the company.

Shareholders representing 37 per cent of the Irish drug-maker’s stock are trying to scuttle the plans, the FT reported.

“The goal is for us to secure access to additional liquidity in the longer term,” Mr Cook said. The company is “not settled on selling the stake” and that the majority of shareholders are “supportive” of the strategy, he said.

Elan released its fourth-quarter figures today which showed a 24 per cent rise in revenues driven by sales of its multiple sclerosis drug Tysabri, and said it expected further growth this year.

Elan recorded net income per share of 36 US cents in the three months to the end of December versus a loss per share of 18 cents a year earlier.  It recorded a net loss per share of 15 cents for the full-year.

The group said a deferred tax benefit of $236.6 million in the United States helped it record a net loss of $71 million last year versus a $405 million loss in 2007.

“Financial results improved, clinical programs advanced within our therapeutic areas, our science and discovery programs continued to progress, and we had growth in both of our business units,” chief executive Kelly Martin said in a statement.

Elan's total quarterly sales rose to $269.8 million. That compared with analysts' estimates of $285.32 million. For 2008, revenues rose 32 percent to $1 billion.

The company said adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) reached $4.3 million in 2008 versus a $30.4 million loss in 2007 - a turnaround it said was "earlier than previously guided”.

“Elan expects revenues to grow by double-digit percentages, to be adjusted EBITDA profitable for the full-year 2009, and to end the year with cash and investment balances in the region of $200 million,” it added.

Elan said in January it had hired Citigroup to conduct a review which could lead to a minority investment or strategic alliance, a merger or sale.

“Elan is committed to completing its review of potential alternatives as promptly as practicable. However, there can be no assurances that any particular alternative will be pursued or that any transaction will occur, or on what terms,” it said.

The company tried last year to sell its profit-generating drug delivery business, but was unable to complete a transaction amid collapsing credit markets.

Elan has announced plans to save $20 million to $25 million by shedding 114 jobs and closing its Tokyo and New York offices.

Shares in Elan have fallen around 73 per cent since hitting a record high in July last year, on investor worries the company could face financing challenges if the credit crisis continues.

Its shares were trading less than 1 per cent higher at €6.41 at 1.15pm in Dublin.

“Elan's posted a solid fourth quarter outturn with adjusted EBITDA exceeding our forecasts notwithstanding the already known weaker performance from Tysabri at the revenue line,” Davy analyst Jack Gorman wrote in a research note.

Elan said around 37,600 patients were on Tysabri therapy worldwide by the end of 2008.

Tysabri is marketed with US partner Biogen. Last week Biogen said it would be “difficult” to achieve the previous forecast of 100,000 patients by the end of 2010. It also reported a new case of the potentially deadly brain infection progressive multifocal leukoencephalopathy, or PML.

Reuters/Bloomberg