), soon to be acquired by
), reported a loss of a penny per share in the third quarter of
2013 from its continuing operations, compared with the year-ago
loss of 33 cents per share.
BIOGEN IDEC INC (BIIB): Free Stock Analysis
ELAN CP PLC ADR (ELN): Free Stock Analysis
PERRIGO COMPANY (PRGO): Free Stock Analysis
WUXI PHARMATECH (WX): Free Stock Analysis
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Elan's third quarter of 2013 revenues from continuing operations
came in at $48.6 million. Third quarter revenues primarily
consisted of 12% royalty on net sales of the multiple sclerosis
drug, Tysabri. We note that Tysabri is currently marketed by
) while Elan receives royalties on the drug.
However, the company reported earnings of 3 cents per share from
its total operations (including discontinued operations),
compared to a loss of 39 cents in the year-ago quarter.
Earnings and revenues, as per the Zacks Consensus Estimate, were
3 cents per share and $57 million, respectively.
During the reported quarter, selling, general and administrative
(SG&A) expenses were almost flat at $24.1 million. Research
and development (R&D) expenses came in at $17.4 million, down
24%. The lower R&D expenses reflect the impact of
In Sep 2013, Elan initiated a phase IIa study on ELND005 to
evaluate the safety and pharmacokinetics of the candidate in
comparison to placebo in young adults suffering from Down
syndrome without dementia. The study will also include select
cognitive and behavioral measures.
ELND005 is also being developed for the treatment of Alzheimer's
disease (AD) and also for the maintenance treatment of bipolar
disease. In Jul 2013, the U.S. Food and Drug Administration (FDA)
granted a fast track designation to ELND005 for the treatment of
neuropsychiatric symptoms in AD.
Elan closed its Tysabri transaction with Biogen earlier this
year. Biogen paid an upfront payment of $3.25 billion to Elan. As
a result, Biogen gained full strategic, commercial, and
operational control of the drug.
Elan will be receiving continuing royalties in the future. Elan
is eligible to receive a royalty payment of 12% on worldwide net
sales of Tysabri (for all indications) for the first year. After
the first year, Elan will receive a royalty of 18% on up to $2
billion of global net sales of Tysabri and 25% thereafter.
Elan to be Acquired by Year End
In July this year, Perrigo announced its intention to acquire
Elan for approximately $8.6 billion. The cash and stock deal,
cleared by the boards of directors of both companies, is expected
to close by the end of calendar year 2013.
Following the closure of the deal, the shareholders of Perrigo
will own approximately 71% of the merged entity while Elan
shareholders will possess the balance. As per the terms of the
deal, each stockholder of Elan will be entitled to receive $6.25
per share in cash from Perrigo following the closure.
Furthermore, each shareholder of Elan will receive 0.07636 shares
of the merged company for each Elan share. We expect investor
focus to remain on the Perrigo transaction.
Elan, a biotechnology company, currently carries a Zacks Rank #4
) looks well placed in the biotech space with a Zacks Rank #1