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| Elan Reports Record Third Quarter Results |
- Total Revenue Up 24%, Product Revenue Up 44% -
- Diluted Earnings Per Share Up 32%, Before Charges -
- Announces Significant Extension to Pain Management Franchise -
- Announces Commencement of Clinical Trials for AN-1792 and Antegren -
DUBLIN, Ireland, Oct. 25 /PRNewswire/ -- Elan Corporation, plc (NYSE: ELN)
("Elan") today announced net income for the third quarter of 2001 of
$183.5 million and $0.50 per diluted share, excluding other charges, compared
to net income of $133.6 million and $0.38 per diluted share for the third
quarter of 2000, excluding other charges and a non-recurring net investment
gain, representing increases of 37% and 32%, respectively.
Total revenue increased from $390.3 million in the third quarter of 2000
to $484.3 million in the third quarter of 2001, an increase of 24%, reflecting
an increase of 44% in product revenue to $381.0 million. Contract revenue
declined by 18% to $103.3 million in the third quarter of 2001, mainly
reflecting the termination of a research and development arrangement in the
third quarter of 2000 (Spiros Development Corp II, Inc.). Product revenue
accounted for 79% of total revenue in the quarter compared to 68% in the third
quarter of 2000. The gross margin on product revenue increased to 76% in the
quarter compared to 68% in the third quarter of 2000.
Commenting on the results, Donal J. Geaney, Elan's chairman and chief
executive officer said, "Our key products continued to perform strongly during
the third quarter of 2001. Revenues for Zanaflex(TM), Skelaxin(TM),
Abelcet(TM) and Maxipime(TM) increased by 49%, 51%, 21% and 112%,
respectively, in the third quarter of 2001 compared to 2000. Zonegran(TM)
revenue was $16.4 million in the third quarter of 2001. Zonegran is showing
consistent prescription growth month-on-month. We expect that Zonegran is now
likely to exceed its revenue target for the year. Myobloc continues to gain
market share in the treatment of cervical dystonia."
Elan has a number of New Drug Applications deemed approvable by the U.S.
Food and Drug Administration ("FDA"). With respect to Frovelan(TM), we are in
the process of completing final matters arising on the FDA review and
anticipate approval this quarter. With respect to Prialt(TM), we continue to
press the FDA for the earliest possible approval of this important molecule."
I am pleased to announce that Elan has acquired a portfolio of pain
management products from Roxane Laboratories, Inc., a subsidiary of the
Boehringer Ingelheim Corporation. These products are marketed in the United
States and generated in excess of $50 million in revenue for 2000. The
portfolio of products includes Roxicodone(TM) (immediate release oxycodone
hydrochloride) and Oramorph(TM) SR (sustained release morphine sulfate). The
portfolio is complementary to our range of currently marketed and development
stage pain management products."
We made significant progress on Antegren(TM) and our Alzheimer's disease
candidate (AN-1792) during the quarter. Antegren, which Elan is developing
jointly with Biogen, Inc., showed a significant reduction in new lesions
compared to placebo as seen on gadolinium-enhancing MRI. The primary efficacy
endpoint, the cumulative number of new enhancing lesions over six months, was
met. In the placebo group, there was a mean of 9.6 lesions, while in the
Antegren 3 mg/kg and 6 mg/kg groups there were means of 0.6 lesions and 1.2
lesions, respectively. The number of MS relapses over the treatment period
was also reduced, with 34 relapses in the placebo group compared to 19 in the
Antegren 3 mg/kg group and 14 in the Antegren 6 mg/kg group. Antegren was
generally well tolerated at all dose levels. Phase III clinical trials for
both the MS and Crohn's disease indications are scheduled to commence this
quarter."
In collaboration with our development partner, American Home Products
Corporation, I am pleased to announce that a Phase IIA clinical study with
AN-1792 commenced in the United States on October 15," Mr. Geaney concluded.
Research and development expenses were $81.7 million in the third quarter
of 2001, compared to $76.9 million in the third quarter of 2000. This
reflects lower expenditure on terminated drug delivery programs previously
funded by Dura, offset by increased costs for Antegren and the Alzheimer's
disease programs. Selling, general and administrative expenses increased by
15% to $153.0 million in the third quarter of 2001, reflecting the acquisition
of certain dermatology products in the fourth quarter of 2000 and increased
marketing expenses.
Operating income in the third quarter of 2001 increased by 64% to
$156.9 million compared to $95.9 million in 2000. Net interest and other
income decreased by 50% to $31.8 million in the third quarter of 2001 compared
to $64.2 million in the comparable quarter of 2000, mainly reflecting a
non-recurring net investment gain of $23.8 million in the third quarter of
2000.
Net income after taxes and before other charges in the third quarter of
2001 increased by 37% to $183.5 million compared to $133.6 million, excluding
other charges and a non-recurring net investment gain, in the third quarter of
2000. This primarily reflects growth in product revenue and the improved
gross margin on product revenue.
In the third quarter of 2001, Elan incurred a charge of $54.9 million for
rationalization and integration activities. The charge is primarily comprised
of severance and relocation costs relating to the pharmaceuticals business
(reflecting the relocation of personnel to San Diego from San Francisco and
New Jersey), and asset write-downs and costs related to the discontinuance of
pulmonary drug delivery research in San Diego.
The non-recurring charge for the quarter can be analyzed as follows:
Item description (dollars, in millions)
Integration and rationalization charges 16.9
Asset write-downs and other
(discontinuance of pulmonary drug delivery research) 29.2
Severance 8.8
Total 54.9
In 2000, Elan implemented the SEC's Staff Accounting Bulletin No. 101
("SAB 101"), which requires certain initial fees to be deferred and amortized
over future periods. As a result of the implementation of SAB 101, certain
initial fees recognized in prior periods have been deferred and are being
amortized over the terms of the relevant agreements. In the first quarter of
2000, Elan recorded a charge of $344.0 million for the cumulative effect
(i.e., for the period to December 31, 1999) of this accounting change relating
to fee income recognized in prior years. Previously reported results for the
third quarter of 2000 reflect the implementation of SAB 101.
Elan is a leading worldwide fully integrated pharmaceutical company
headquartered in Dublin, Ireland. Elan conducts its worldwide business,
including operations relating to research and development, manufacturing and
marketing, principally through wholly owned subsidiaries incorporated in
Ireland, the United States and the United Kingdom. Elan is focused on the
discovery, development and marketing of therapeutic products and services in
neurology, pain management, oncology, infectious disease and dermatology and
on the development and commercialization of products using its extensive range
of proprietary drug delivery technologies. Elan shares trade on the New York,
London and Dublin Stock Exchanges.
This communication includes certain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements are based on management's current expectations but actual results
may vary materially due to various factors. The forward-looking statements in
this communication include statements about future operating results. Certain
factors, including Elan's inability to successfully integrate the acquired
companies, attain milestone payments, develop products, gain approvals, launch
and market its products and other economic, competitive, business and/or
regulatory factors affecting Elan's business generally, could cause actual
results to differ materially from those described herein. More detailed
information about these factors is set forth in Elan's filings with the
Securities and Exchange Commission, including Elan's Annual Report on
Form 20-F for the fiscal year ended December 31, 2000. Elan is under no
obligation to (and expressly disclaims any obligation to) update or alter
these forward-looking statements, whether as a result of new information,
future events or otherwise.
Elan Corporation, plc
Consolidated Statement of Income
Three months ended September 30, Nine months ended September 30,
2000 2001 2000 2001
US$m US$m US$m US$m
Revenues
264.3 381.0 Product revenues 737.9 1,061.5
126.0 103.3 Contract revenues 359.1 313.4
390.3 484.3 Total revenues 1,097.0 1,374.9
Costs and Expenses
76.9 81.7 Research & development 246.0 234.2
84.1 92.7 Cost of goods sold 234.7 280.4
133.4 153.0 Selling, general & administrative 377.1 451.6
294.4 327.4 Total operating expenses 857.8 966.2
95.9 156.9 Total operating income 239.2 408.7
64.2 31.8 Interest and other income (net) 106.3 96.1
160.1 188.7 Net income before tax 345.5 504.8
and other charges
(2.7) (5.2) Taxation (8.7) (13.2)
157.4 183.5 Net income before other charges 336.8 491.6
(115.0) (54.9) Other charges (341.3) (152.4)
-- -- Cumulative effect of (344.0) --
accounting change
42.4 128.6 Net income / (loss) (348.5) 339.2
319,363 338,677 Weighted average number of 310,542 334,231
ordinary shares outstanding
(in thousands)
$0.38 $0.50 Diluted earnings per ordinary $0.93 $1.35
share before other charges
and net non-recurring
investment gain
$0.12 $0.35 Diluted earnings (loss) per ($1.12) $0.94
ordinary share after other
charges and net non-recurring
investment gain
Note: Previously reported results for periods in 2000 are restated to give
effect to the merger with Dura Pharmaceuticals, Inc. in
November 2000, which was accounted for as a "pooling of interests"
transaction.
Elan Corporation, plc
Consolidated Balance Sheet
As at As at
December 31, September 30,
2000 2001
Assets US$m US$m
Current Assets
Cash and marketable investment securities 1,161.2 1,681.1
Other current assets 495.7 604.7
1,656.9 2,285.8
Intangible assets 1,999.9 2,246.4
Property, plant and equipment 353.5 372.8
Investments 642.7 1,049.2
Total Assets 4,653.0 5,954.2
Liabilities and Shareholders' Equity
Shareholders' equity 2,276.9 2,966.0
Accounts payable and accrued liabilities 1,067.5 1,331.8
4.75% exchangeable notes 324.7 --
7.25% senior notes -- 650.0
3.25% zero coupon subordinated exchangeable notes 921.3 943.8
3.5% convertible subordinated notes 62.6 62.6
Total Liabilities and Shareholders' Equity 4,653.0 5,954.2
SOURCE Elan Corporation, plc
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CONTACT:
Investors, U.S. - Jack Howarth,
+1-212-407-5740 or +1-800-252-3526; Investors, Europe - Emer
Reynolds, +353-1-709-4000 or +00800-28352600; Media - Max
Gershenoff, +1-212-407-5740 or +1-800-252-3526, all for Elan
Corporation, plc
