Elan seeks deals to raise cash

Tue Nov 18, 2008 6:11pm EST

NEW YORK (Reuters) - Elan Corp Plc (ELN.N: Quote, Profile, Research, Stock Buzz)(ELN.I: Quote, Profile, Research, Stock Buzz) aims to cut costs, close locations and raise up to $500 million as it seeks to strengthen its balance sheet and offset slower growth of its multiple sclerosis drug Tysabri.

Elan, which expects to generate revenue of about $1 billion in 2008, is based in Ireland, but also has facilities in San Francisco, New York, Boston, Pennsylvania, Georgia and Tokyo.

Chief Executive Officer Kelly Martin said on Tuesday at the Reuters Health Summit in New York, that Elan is considering closing two of those locations or reducing its presence there, though the company has not yet decided which ones.

"We are currently going through a process where we are evaluating where we can take costs down and reallocate and reduce," he said. "There are a couple of locations we can potentially exit entirely."

In the nine months ended September 2008, Elan posted a net loss of $240.5 million. It is burning cash at a rate of more than $300 million a year, and it has $1.7 billion in debt that comes due over the next five years.

Elan's U.S. stock has fallen over 80 percent since early July to $6.06 late Tuesday afternoon, hurt by safety concerns over Tysabri and disappointing results from a mid-stage trial of its experimental Alzheimer's disease vaccine.

The company is on track to run out of money in less than two years if it doesn't take firm action.

To that end, Martin said he wants to raise between $300 million and $500 million within the next six to eight months, and he expects to do that by selling the rights to some of its experimental products.

Elan recently tried to sell its drug technology business, worth about $1 billion, but the credit crisis killed off a hoped-for sale to private equity and a sale is now unlikely for at least a year, Martin said.

"I'm not optimistic the markets will get back to normalcy any time soon," he said. "Our plans are not to wait around for a transaction but to run the business."

Kelly said the business is profitable but is not central to its portfolio of neurology drugs, and the company still hopes to sell it once the market improves.

For now, the company will focus on raising money by selling rights to experimental drugs in areas such as cancer and rheumatoid arthritis, products that are in early stages of development.

"By the middle of 2009 you can expect us to do something with our pipeline," he said.

Martin said the company is determined to keep its pipeline of drugs for neurological disorders, including experimental products to treat Alzheimer's disease, Parkinson's disease and Parkinson's disease.

Elan and its U.S. partner Biogen Idec Inc (BIIB.O: Quote, Profile, Research, Stock Buzz) have said they expect 100,000 patients to be taking Tysabri by the end of 2010, a figure Kelly said would represent around 20 percent of the market, but some analysts consider that over-optimistic.

Martin said it will begin to become clear over the next few quarters whether the companies can reach that figure, as they will reflect physician responses to the latest cases of PML, a potentially deadly brain infection that caused the drug to be temporarily withdrawn in 2005.

In the third quarter, Biogen said sales of Tysabri had slowed, though it maintained it can still meet the patient target of 100,000. For that to happen, growth will have to accelerate.

Tysabri was reintroduced in 2006, with stricter warnings, and physicians had started to become more comfortable with the drug. Then, at the end of July, two more cases of PML were reported. And another was reported in October.

That has once again cast doubt on the ultimate sales potential for the drug, but Martin sounded optimistic.

"We are hoping the emotion and rumoring around PML is beginning to fade away a little bit," he said. "I think a 20 percent market share for the drug is a very achievable number over time."

(For summit blog: summitnotebook.reuters.com/))

(Reporting by Toni Clarke, Ben Hirschler; Editing by Richard Chang)

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Tysabri PML patient deteriorates - researcher

By Reuters
September 19, 2008

BOSTON—One of two European patients, who developed a potentially deadly brain infection after taking the multiple sclerosis drug Tysabri, is deteriorating and likely to suffer brain damage, according to a researcher involved in their care.

The other patient diagnosed with the infection in July is recovering, the researcher said Friday.

The drug, made by Biogen Idec Inc and Elan Corp , was temporarily withdrawn from the market in 2005 after being linked with three cases of an often lethal infection known as progressive multifocal leukoencephalopathy, or PML.

Due to its advantages over older MS treatments and patient willingness to take on the risks, Tysabri was reintroduced with stricter warnings in 2006. No new cases were reported until the end of July, when Biogen announced that two patients had developed the infection.

Biogen said on Friday that no further new PML cases have been confirmed and its shares closed up 6 percent. Elan shares closed up more than 1 percent.

Dr. Ralf Gold of Ruhr University Bochum, Germany, said in an interview that a German patient, hospitalized near the town of Freiburg, is close to a coma and being fed through tubes, though he is breathing on his own.

The other patient, a 37-year-old Swede, is in a rehabilitation center near Stockholm and suffering only from mild weakness on one side of his body.

Gold said the 52-year-old German patient was not diagnosed until at least three months after developing the disease, whereas the Swedish patient's condition was identified in less than a month. As a result, the German patient had a higher level of the virus in his brain.

The two were treated through plasmapheresis, a procedure in which a patient's blood is removed, cleared of the drug, and replaced.

Gold presented an update on the two cases at the World Congress on Treatment and Research in Multiple Sclerosis in Montreal.

Investors have been watching the patients' progress to see whether PML can be reversed. They are also watching to see how many cases of the infection develop among patients taking the drug, which is considered a critically important growth driver for both companies.

Tysabri had second-quarter sales of $200 million, but its fortunes have been inextricably linked to PML concerns.

"The drug's strong efficacy profile should keep it as a preferred agent, in our opinion," Leerink Swann analyst William Tanner wrote in a research note.

In a report ahead of Gold's update, Geoff Porges, an analyst at Sanford Bernstein, said that if the disease becomes manageable through plasmapheresis then the impact of these cases will be blunted.

He said experts interviewed at the meeting have confirmed that in Europe and North America there are a number of patients with suspected PML whose physicians discontinued Tysabri use.

"We believe it is incumbent on Biogen to disclose this information to physicians in order for them to fully evaluate and disclose the risks associated with the product," he said.

Biogen spokeswoman Naomi Aoki said, "We have disclosed the only two cases of diagnosed PML that we have seen so far."

Gold added that while certain databases pick up cases in which a doctor suspects PML and discontinues Tysabri, the cases have not been confirmed either through an MRI or any other scientific measures.

Gold said the virus appears to be leaving the German patient's brain, but he is suffering from brain damage brought about by a condition known as immune reconstitution inflammatory syndrome, or IRIS. This occurs when the immune system, in eliminating an infection, produces an excessive inflammatory response that can worsen symptoms.

It is most likely the patient will be permanently brain damaged, Gold said. The only question is by how much.

The patient was started on a course of corticosteroids on Friday, the standard treatment for IRIS.

It typically becomes clear within a few days whether such a treatment is likely to work, Gold said. In the meantime, the patient is in a critical condition but not in intensive care.

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Biogen Idec CEO predicts more brain disorders in Tysabri patients

Tuesday, March 18, 2008

The CEO of Biogen Idec told investors Tuesday that he expects to see more cases of a rare, fatal brain disorder in patients taking the drug Tysabri, Reuters reported Tuesday.

But James Mullen, the executive, thinks the problems are unlikely to create more regulatory problems for Tysabri, a multiple sclerosis drug pulled temporarily from the market in 2005 thanks to the brain disease.

James Mullen told investors that "we anticipate there will be some additional cases of PML," according to Reuters. PML is the abbreviation for the brain infection seen in two Tysabri patients three years ago. Biogen Idec (Nasdaq: BIIB), which makes the drug at a facility in Research Triangle Park, voluntarily pulled the treatment from the market.

Tysabri has since returned under a patient-monitoring program, however, with no new cases of PML. Biogen hopes to make it a blockbuster, billion-dollar drug by 2010.

New cases of PML in Tysabri patients could "create a lot of excitement in the short term given the history of this product," Reuters reported Mullen as saying. But the Biogen chief added that he would see "no regulatory problems." Many patients take Tysabri despite its risks because the drug is highly effective.

Biogen co-markets Tysabri with Elan Corp. of Ireland.

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U.S. Regulators to Review Tysabri for Crohn's Disease

Associated Press

DUBLIN, Ireland -- Elan Corp. and Biogen Idec Inc., co-makers of Tysabri, announced Tuesday that U.S. regulators soon would review the drug for its possible use by sufferers of the gastrointestinal Crohn's disease.

Both companies said two review committees of the U.S. Food and Drug Administration would jointly consider July 31 whether to permit sale of Tysabri to treat Crohn's, which causes chronic but nonfatal inflammation of the intestines and afflicts one million people world-wide.

Clinical trials of Tysabri -- which last year was approved for use in the United States and European Union to combat the most advanced cases of multiple sclerosis _ have indicated that the drug is effective in preventing inflammatory immune cells from penetrating the wall of the intestine, limiting the damage they can cause.

Tysabri's use for MS patients has been heavily restricted because of its link to a rare, usually fatal disease of the central nervous system called progressive multifocal leukoencephalopathy, or PML. Both companies temporarily withdrew the drug from sale in February 2005 after three patients in clinical trials contracted PML; two, including a Crohn's sufferer, died.

Elan of Dublin, Ireland, and Biogen Idec of Cambridge, Mass., in December applied for FDA approval of Tysabri for Crohn's sufferers.

The disease most commonly develops in people in their teens and 20s and has no cure. It can cause diarrhea, abdominal cramps, fever and bowel obstructions, leading to lost appetite and weight.

The leading current treatment for Crohn's is Remicade, manufactured by Johnson & Johnson. Analysts say, if given FDA approval, Tysabri probably would be prescribed only to those Crohn's sufferers who were not responding to treatment from longer-established, lower-risk drugs.

Copyright © 2007 Associated Press