Elan Corporation, plc (ELN) Message Board

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Biotech / Medical : Elan Corporation, plc (ELN)

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To: Sidney Street who wrote (6248)	1/13/2005 9:10:36 AM
From: tom pope	of 10345

Merrill Lynch. If I remember correctly, they were high on Elan until it started tanking, and have been silent since. Elan Corporation Reinstating with a Neutral; Priced for Perfection & Perfectly Feasible We initiate coverage of Elan with a Neutral rating. An in-depth report is also available. Elan’s current share valuation appears to be pricing in best case scenarios for newly launched Tysabri in multiple sclerosis and Crohn’s disease. However, our own analysis and clinical checks (in MS and Crohn’s) indicate that these best case scenarios may actually play out. In our view, Elan’s share price also reflects: (1) an option on rheumatoid arthritis (phase II data due 3Q05E) and Alzheimer’s disease (phase II trial starts 1Q05E), neither of which are included in our models, plus (2) the scarcity value accorded to European biopharma growth stories. We believe that positive potential news flow expected in 1H05E should continue to support the current price. Our DCF valuation is about $21 per ADR (EUR16 per share), which assumes peak Tysabri sales of $3.7 bn. If upside potential is achieved for Tysabri in MS and Crohn’s (peak sales of almost $5 bn), then our valuation approaches $30 per ADR. We have published an in-depth report today. Erica Whittaker Comment available. Price - Local / ADR: EUR21.45 / $28.35 Estimates (Dec) 2003A 2004E 2005E Total Revenue 685.6 496.0 617.3 EBITDA (259.3) (245.9) (222.5) PBT – Adjusted (500.0) (423.6) (478.6) EPS – Adjusted Basic (1.34) (1.07) (1.21) EPS Adjusted (EUR) (1.19) (0.86) (0.92) EPS Growth % (78.4) (20.0) 13.2 CFPS (0.85) (0.75) (0.90) Market Cap Eur 8,284mn Investment Rating Neutral Volatility Risk Rating High Investment Opinion - Local: C-2-9 Investment Opinion - ADR: C-2-9 Symbol/Exchange - Local: ELNCF / Irish Symbol/Exchange - ADR: ELN / New York

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