NEWS & COMMENTS

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                                                                     ELAN (ELN)

      The game of the skeptics about Elan’s future will not play for long in the minds of vulnerable investors who should be aware by now that Tysabri might generate over $2 billion especially when projected sales of the drug by a substantial number of stockbrokers in Dublin exceeded this number by around 200 million  in worldwide annual sales by 2009. Skepticism usually loses energy when real numbers are announced. Elan has already reported a smaller second-quarter loss and predicted it would return to profit soon because of the burgeoning sales of Tysabri. The firm reported that its net loss in the quarter ending June 30 fell 37 percent to $90.5 million from $142.6 million in the second quarter of 2005. Sales rose 15 percent to $136.4 million from $118.6 million.

        The same is also the opinion of analysts who said that the decision by the FDA and European regulators to permit some MS sufferers to use Tysabri should enable Elan to return to profitability, possibly next year, for the first time since 2002. According to Shane Cooke, Elan's executive vice president and chief financial officer, Tysabri is already selling in Germany, Ireland, Sweden, the United Kingdom and the United States, but would take between six and 12 months to reach the market throughout the 25-nation European Union. Cooke said that the company is confident that revenues from Tysabri will drive our return to profitability.    

        More important was Elan’s CEO Kelly Martin’s remark at a news conference that the company was very pleased with what it has seen in the first few weeks of Tysabri sales. Elan wouldn't announce any sales figures until the third-quarter results. The annual cost of Tysabri exceeds $28,000.

        The FDA initially approved Tysabri in November 2004. Elan and Biogen Idec pulled the drug from the U.S. market three months later, after three people taking it in clinical trials contracted a rare brain disease called PML; two died from the usually fatal condition. Last June, the FDA approved the resumption of Tysabri’s sales after no new PML cases were detected among more than 5,000 other clinical trial patients. European regulators gave their approval recently.

         More than 400,000 people suffer from MS in the European Union, about 350,000 in the United States.

Elan's president of research and development, Lars Ekman, said the company also expect to gain approval next year to provide Tysabri to sufferers of Crohn's disease.

        Recently, Elan struck a deal with Abbott Laboratories, which formed a kind of partnershi[p with AstraZeneca to combine their cholesterol drugs inn one pill. The firms decided to use Elan’s NanoCrystal technology to enable the combination of Crestor with either TriCor or a next-generation version of TriCor called "ABT-335." The one-pill combo drug is intended to lower "bad" cholesterol and triglycerides while raising "good" cholesterol. Elan will further license its NanoCrystal Technology to Abbott to help develop the combo drug if it uses the present version of TriCor.

Prohost Comments: Investors do not seem to fathom the importance and meaning of this agreement, which validates Elan’s NanoCrystal technology. They do not seem to recognize the value of Tysabri, of Elan's technologies, its product pipeline and its growing alliances.  We do.  

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