Quarter's #s, Looks Good
elancorp.com
News 10/25/2001
Elan reports record third quarter results
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, October 25,2001 -- 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 ZanaflexT, SkelaxinT,
AbelcetT and MaxipimeT increased by 49%, 51%, 21% and 112%,
respectively, in the third quarter of 2001 compared to
2000. ZonegranT 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 FrovelanT, we are in the process
of completing final matters arising on the FDA review and
anticipate approval this quarter. With respect to PrialtT,
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
RoxicodoneT (immediate release oxycodone hydrochloride)and
OramorphT 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 AntegrenT 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 programmes previously funded by
Dura, offset by increased costs for Antegren and the
Alzheimer's disease programmes. 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 rationalisation 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 analysed
as follows:
dollars, (in millions) Integration and rationalisation 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
commercialisation 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. |
