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Biotech / Medical : Elan Corporation, plc (ELN) -- Ignore unavailable to you. Want to Upgrade?

To: idos who wrote (9910)	8/17/2008 8:34:20 AM
From: Qualified Opinion	Respond to of 10345

Big boost for Elan share price 17 August 2008 By Richard Curran Shares in Elan enjoyed a very strong boost at the end of last week, climbing 18 per cent on Friday in Dublin to finish the week at €8.98. This was up a massive 26.8 per cent from their close on Wednesday and valued the group at €4.2 billion. Big share price movements are not uncommon at this time of year, and volumes in Dublin were quite thin. In the US, where most of the Elan stock is traded, the shares were up 17 per cent to $13.84 on Friday, having gained 27.2 per cent in just two days. The stock has been shrouded in uncertainty since it fell sharply on the back of worrying news about resurfacing of the nervous system illness PML in connection with its Tysabri drug. The shares fell to a new 52-week low last Wednesday as speculation filtered out that its evaluation process for its drug technology unit (EDT) was progressing quickly. Media reports suggested that it was selling EDT and that first round offers had been submitted last week. The speculation also said that Goldman Sachs was handling the sale and could progress to a second round of offers as quickly as this Tuesday. Those listed as among the interested buyers were Bain Capital and Texas Pacific Group. The speculation suggested that the unit could be worth around $1.3 to $1.4 billion. Goodbody has valued the unit at between $1.1 billion and $1.4 billion, saying it is forecast to report full-year 2008 revenue of $281 million. ‘‘Similar margins to full year 2007 would imply EBITDA of around $130 million,” Goodbody said last week. However, both Goodbody and Davy Stockbrokers agreed that, given the question marks over Tysabri, Elan would be selling off a cash-generative business. ‘‘It may now be in the company’s better interests to retain the cash-generative division, at least in the short to medium term,” Goodbody’s Ian Hunter said. ‘‘Given the change in perception on Bapineuzumab, the wisdom of the sale of EDT at this juncture is now under question. That said, if an offer well over Elan’s estimated value for the unit is forthcoming, the company will be obliged to consider divesting the unit.” Davy’s Jack Gorman reiterated those sentiments last week, saying: ‘‘It may be more prudent to retain cash-generative units like EDT, at least until there is clarity on Tysabri patient retention and take-up.” Elan has experienced three massive share price collapses since 2001. At least Elan chief executive Kelly Martin can ponder the merits of selling EDT or not, and has options making the long slow climb backup the hill again. Link: thepost.ie