From Merrill's 12/2 research report on ELN:
Investment Highlights:
ú Elan?s Alzheimer?s disease R&D program
continues to attract attention in the scientific
community. An article today in the prestigious
journal, Nature, highlights recent advances in
the beta-secretase hypothesis, an enzyme
involved with amyloid plaque formation, as a
causal factor in Alzheimer?s disease.
ú Beta-secretase agents are another aspect of
Elan?s research effort, and is distinct from its
vaccine candidate, AN-1792. We believe that
Elan has identified several preclinical
candidates, which may position it as a front-runner
among companies, such as Pharmacia
& Upjohn, SmithKline Beecham and Amgen,
which are also active in the area.
ú We expect AN-1792 to begin Phase I human
trials shortly. The clinical program involves
one dose in up to 30 patients having mild
disease. The primary endpoint will be to
establish safety. We expect a second Phase I
trial, involving multiple doses, to be initiated
in the U.K. during the first quarter.
ú We continue to believe that overall
fundamentals remain on track. We expect NDA
filing for ziconotide before year-end and first
quarter launches of Zonagren and Neurobloc.
Frovatriptan should be launched in early2001.
ú With financial issues no longer of great
relevance, we expect the focus to be on the
impending FDA approval, filings and launches
of key products. Although Elan appears to be
establishing itself as a world leader in
Alzheimer?s disease research, it is not yet a
factor in the company?s valuation.
ú The stock?s P/E remains at a significant
discount to projected EPS growth. Improved
quality of earnings, now that R&D vehicles
are being acquired, a strong new product
launch schedule for 2000-2001, and rising
scientific visibility, should fuel a higher P/E,
more in line with projected earnings growth.
Our $45 price objective is reaffirmed. |
