Elan shows $2.4bn loss for 2002
pharmafile | October 24, 2003 | News story | |
Irish pharmaceutical company Elan made a larger than expected loss of $2.39 billion last year.
Shares in the troubled company fell by nearly 12% after the announcement, continuing their year-long slide. Elan was Ireland's largest quoted company a year ago, but its stock has since fallen by more than 90%.
Elan is under investigation by the US Securities and Exchange Commission and has been forced to sell off products that accounted for more than half of its sales in order to meet its debt commitments.
Ronan Wallace, analyst at Dolmen Securities in Dublin, told the Financial Times that Elan had avoided a cash crunch, but the weak underlying performance raised worries about its long-term survival.
"At the moment it is a cash generation story. $20 million more or $20 million less in revenues is not going to make much difference at this point, but you are looking at much lower revenues going forward, and more products could go", said Mr Wallace.
The company expects to raise $1.5 billion from the proposed sale of its primary care franchise, which includes Abelcet, Actiq and Adalat CC.
Commenting on the sale, Dr Garo Armen, Elan Chairman, said: "This renewed balance sheet strength enables us to meet our financial obligations and invest in our pipeline, which is critical to building value for Elan shareholders and bringing to market important products for treating debilitating diseases".
Elan said its aim now was to develop new treatments for Alzheimer's disease, Crohn's disease and multiple sclerosis and optimise its present commercial business.
In 2001, Elan made a profit of $343 million. Since then, the company has seen a drastic fall in profits, mainly due to the introduction of generic competition for its muscle relaxant Zanaflex. There has also been serious concern over Elan's off-balance transactions, which prompted the drop in the company's share value over the year and the SEC investigation.
