Investment banker to be Elan chief executive
pharmafile | October 27, 2003 | News story | |Â Â ElanÂ
Kelly Martin, a former senior executive at Merrill Lynch, has been named chief executive of troubled Irish pharmaceutical company Elan.
The company is undergoing massive restructuring after investor confidence nose-dived nearly a year ago when then chief executive Donal Geaney admitted two off-balance sheet expenses had not been consolidated into the company accounts.
The company’s share price has fallen 95% since then, and is still under investigation by the US Securities and Exchange Commission. Investors have been somewhat placated by the rapid sell off of products in non-core business areas and cost reduction programmes but the company continues to run massive losses.
Chairman Dr Garo Amen, who has acted as chief executive since the departure of Mr Geaney in July, welcomed Mr Kelly appointment. He said the ex-investment banker had all the required skills and “tremendous passion” for the job, despite no direct experience in pharmaceuticals.
Analysts say the appointment could signal that Elan is preparing for a potential break up of its business units.
Mr Kelly said the company would continue to dispose of non-core assets and focus on neurology, pain management and immunology products.
“After more than 20 years on Wall Street and in the world capital markets, I am joining a company which has the opportunity to change the way diseases like Alzheimer, Crohn and multiple sclerosis are treated,” he said. “My goal is to help bring these important compounds to market by ensuring a strong financial future and operating platform for Elan.”
The appointment has raised questions on the stock exchanges, however, since Merrill Lynch was lead investor in a company that acquired royalty rights to some of Elan products. The bank continues to be Elan broker and underwrite its equity offering and has its former chairman, Daniel Tully, on the pharma company board.
Mr Martin stressed he had had no involvement in Merrill Lynch dealings with Elan, and stated his commitment to greater financial accountability.
“My focus will be simplifying the structures and making more transparent the balance sheet of the company,” he said.
Shares in the company lifted recently with promising phase II trials results for multiple sclerosis treatment Antegren (natalizumab).
New data showed the drug reduced new inflammatory brain lesions and relapses in patients with the relapsing form of the disease.
Elan is collaborating with Biogen on the development and marketing of the drug, the first in a new class of compounds called the selective adhesion molecule (SAM) inhibitors.
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