(Updates with closing share price in 10th paragraph.)
Oct. 27 (Bloomberg) -- Elan Corp. reported a profit in the third quarter on higher revenue from the multiple sclerosis drug Tysabri and proceeds from the sale of a drug-manufacturing unit.
Net income was $674.1 million, compared with a loss of $47.8 million a year earlier, the Dublin-based drugmaker said in a statement today. Analysts predicted net income of $13.4 million, according to the average of three estimates compiled by Bloomberg. The company reaffirmed its forecast for 2011.
Tysabri sales jumped 28 percent to $392.6 million in the quarter, boosted by U.S. price rises and positive currency effects, Chief Financial Officer Nigel Clerkin said today on a conference call. The company also completed the sale of its Elan Drug Technologies unit to Alkermes Plc for about $1.03 billion last month, allowing increased focus on drug research for MS and Alzheimer’s and Parkinson’s diseases.
“The closing of the EDT deal in particular is transformational for our business, specifically in our ability to address debt and focus appropriate and measured investment in our neuroscience efforts,” Chief Executive Officer Kelly Martin said in the statement.
Revenue for the quarter rose 17 percent to $328.5 million, beating the $327 million average estimate of seven analysts surveyed by Bloomberg. Sales will exceed $1 billion for the full year, Clerkin said.
Elan sold the EDT arm, which aims to improve the way medicines are delivered, to Alkermes in September to pay down debt. As part of the payment for EDT, Elan received 31.9 million Alkermes shares, which were valued at $545.8 million as of yesterday’s closing price. Elan will seek a buyer for the 25 percent stake in about six months, and sees “no shortage of interest” in the deal, Martin told reporters on the call today.
Elan also has the right to a share of any profit from the experimental Alzheimer’s disease drug bapineuzumab, which has the potential to be one of the world’s best-selling medicines, said Corey Davis, a Jefferies & Co. analyst in New York.
The drug, co-developed by Elan with Pfizer Inc.-owned Wyeth, was sold to Johnson & Johnson in 2009. New Brunswick, New Jersey-based J&J expects results from late-stage clinical trials in the middle of next year.
The Irish drugmaker expects revenue to double to $2 billion over the next five years, reflecting an average growth rate of 15 percent.
Elan shares gained 1.4 percent to 7.90 euros in Dublin. The drugmaker has gained 90 percent this year, compared with a 6.9 percent return in the 17-company Bloomberg Europe Pharmaceuticals Index, making Elan the best performer in the index.
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