Shares in Elan clawed back from earlier losses today on the New York Stock Exchange as investors took the view that yesterday’s massive sell-off of the Irish pharmaceutical company may have been overdone.
At 4.20 p.m. Elan shares were trading at $13.60 in New York, down 8.4 per cent on the day. In Dublin Elan was down 10 per cent at 13.50. At one stage this morning Elan shares slumped 28 per cent compounding yesterday’s 47 per cent slide.
Yesterday the market dumped Elan after yesterday’s profit warning which followed sharp falls in the share price in recent weeks due to concerns about its accounting policies - which have been likened to those of collapsed energy trader Enron - and the suspension of testing of its new Alzheimer's treatment drug AN-1792.
A raft of top brokerages have revised their earnings estimates for Elan today following yesterday’s news. Top Wall Street brokerage Goldman Sachs removed Elan from its recommended list today citing "significantly reduced visibility on earnings outlook going forward and no compelling near-term support drivers".
Dublin stockbroker Dolmen Butler Briscoe which issued a "buy" recommendation on Elan on Friday said it still saw significant upside in the medium to long term provided the company clarified a number of issues weighing on the stock.
Pharmaceutical analyst Mr Ronan Wallace said the market was looking for clarification on the future of its AN-1792 testing programme and the identity of marketing partners for future drugs.
Mr Wallace pointed out that on a fundamental basis Elan was now trading at a significant discount to the pharmaceutical sector and clarification should provide upward momentum for the share.