Elan Corporation ( ELN ) reported a loss
of 12 cents per share from its continuing operations in the first
quarter of 2013, narrower than the year-ago loss of 13 cents per
share. Elan's first quarter of 2013 revenues from continuing
operations remained flat at $0.2 million.BIOGEN IDEC INC (BIIB): Free Stock Analysis
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However, the company reported earnings of 11 cents per share from
its total operations (including discontinued operations), compared
to a loss of 5 cents in the year-ago quarter. The company's total
revenues during the reported quarter from its total operations came
in at $344 million, up 19.4% year over year.
Earnings and revenue as per the Zacks Consensus Estimate were 7
cents per share and $318 million, respectively.
Quarter in Detail
During the reported quarter, selling, general and administrative
(SG&A) expenses decreased 3.3% to $29 million. Research and
development (R&D) expenses came in at $19.4 million, down 28.4%
from the year-ago quarter.
Elan expects total operating expenses in 2013 in the range of $170
million to $190 million.
The company also expects to contribute around $60-$80 million to
Janssen AI, a subsidiary of Johnson & Johnson
( JNJ ), during
2013. Out of the expected contribution to Janssen, $30 million was
paid in January this year. The company is left with funding
commitment of $93.2 million to Janssen AI.
Meanwhile, Elan closed its Tysabri (natalizumab) collaboration
transaction with Biogen Idec ( BIIB ) earlier this
month. Biogen paid an upfront payment of $3.25 billion to Elan. As
a result, Biogen gained full strategic, commercial, and operational
control over the drug.
Elan will be receiving a 50% share of Tysabri profits as revenue
for the month of April this year and 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 recently turned down Royalty Pharma's offer to acquire all
the shares of Elan for $11.25 or less per share. Elan' Board of
Directors believed that Royalty Pharma's offer significantly
undervalued the company's current business platform and its future
prospects. The Board was unanimous in rejecting the offer.
Elan, a biotechnology company, currently carries a Zacks Rank #3
(Hold). Currently, well-placed biotech stocks include Zacks Ranked
#1 (Strong Buy) WuXi PharmaTech ( WX ).