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TRANSCRIPT SPONSOR
Wall Street Breakfast

Elan (ELN)
Q2 2007 Earnings Call
July 26, 2007, 8:30 am ET

Executives

Kelly Martin – President, CEO
Shane Cooke – Executive Vice President, CFO
Lars Ekman – Executive Vice President, Research & Development

Analysts

Ian Hunter – Goodbody Stockbrokers
Bill Tanner – Leerink Swann
Corey Davis – Natexis
Orla Hartford – NCB
Jack Gorman

Presentation

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Second Quarter 2007 Financials Results conference call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session. At that time if you have a question, please press *1 on your telephone. If you would like to withdraw your question, press the # key. As a reminder, this conference is being recorded, Thursday, July 26th. I would now like to turn the conference over to Chris Burns, Senior VP of Investor Relations.

Chris Burns

Hello, everyone. Welcome to Elan’s Second Quarter 2007 Financial Results call. I hope you’ve had a chance to review our press release. If not, we’d encourage you to go to our Web site at Elan.com where you can find it. Joining me on today’s call will be President and CEO, Kelly Martin; Executive Vice President and CFO, Shane Cooke; and Executive Vice President Research and Development, Dr. Lars Ekman. Today we’ll take you through our financial results and provide and R&D and business update.

Before we begin with Kelly’s remarks, I’d like to review Elan’s safe harbor statement. Let me remind you that today’s call will contain forward-looking statements about Elan’s financial conditions, results of operations, business prospects, and products and research. These forward-looking statements involve substantial risks and uncertainties that could cause actual results to differ materially from those described or projected. A list of these risks and uncertainties is included in our second quarter press release from this morning, and in our 2006 annual report on Form 20-F and our Form 6-K filed and furnished with the SEC.

Elan assumes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. In addition, today’s conference call and Webcast will include certain financial measures such as EBITDA; earnings before interest taxes depreciation and amortization, and adjusted EBITDA; EBITDA plus or minus share based compensation, net gains or losses on divestment of businesses, other net gains or charges, net investment gains or losses and net charges and debt retirement. These financial measures are non-GAAP financial measures under SEC rules. A reconciliation of these non-GAAP financial measures and most comparable GAAP measure are included in today’s press release.

Now I’d like to turn the call over to Kelly Martin.

Kelly Martin

Thanks, Chris. Good morning/afternoon to everybody. I’d like to welcome you to the call on behalf of both myself and Kyran McLaughlin, our Chairman. As Chris said, joining me on the call today will be Shane Cooke our CFO, and Lars Ekman our President of Research and Development. It just wanted to provide a few opening and introductory comments to our second quarter results. It’s a quarter, first and foremost, that I think demonstrates our continued focus and our progress from an execution point of view against our overall game plan. A few highlights financially, as Shane will go through in more detail, our revenue was up 38% with specific growth in both Tysabri and our drug technology business unit. At the same time we’ve kept our operating costs flat and we continue to reallocate and allocate costs against opportunities as they present themselves.

Secondly, from a talent perspective, we continue to add very selective, very specific talents to Elan. Over the last couple, a few months, we’ve added a number of significant hires. Two areas I’d like to highlight in particular, one is we’ve added a new head of our Biological Manufacturing of Product Science area, and we’ve also added somebody into the drug technology business who is going to focus primarily on product and business development, and continue to grow out that business over time. Futuristically, we’re looking to continue to add people in particular to the neurology space, with obviously a particular focus on Alzheimer’s.

From a pipeline point of view, our pipeline continues to move forward and advance. Obviously, the highlight of the second quarter, which Lars Ekman will go into, is with our partner Wyeth, the announcement that we’d be moving AAB-001, which is currently in phase two, that we would hope to move into phase three and begin that trial sometime before year-end.

Lastly from my comments, with Tysabri we continue to make progress in Tysabri across the board. We are very pleased with the progress and the traction that we have in the EU over the course of the last quarter we’ve launched in France, Greece, Spain, Turkey, all of which are showing early signs of very good traction and uptake, and we also had the reversal from NICE in the UK with regard to national reimbursement for Tysabri for MS. Tysabri becoming the first drug in the UK to get NICE approval from a reimbursement point of view, which we think bodes very well for the product as we mature it forward across the various and different markets.

In the U.S. we increased our target position market by 20%, the number of physicians that we have targeted initially, we still believe, based on the broad product mix of the current market in the U.S., that there remains upside in the U.S. and the potential in the U.S. remains significant. We recognize the complexities in the U.S., and we’re working very closely with our partner Biogen Idec. on making sure we have and maintain the type of traction that we think we need so that we ultimately reach our potential, and we have a very specific focus with the key neurologist with the biggest MS practices that are located throughout various locations in the U.S.

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