RNS No 8020f
ELAN CORPORATION PLC
23rd July 1997
ELAN ANNOUNCES SECOND QUARTER 1997 RESULTS
REVENUE INCREASE OF 27% AND NET INCOME INCREASE OF 43%
DUBLIN, IRELAND, July 23, 1997 -- Elan Corporation, plc (NYSE:ELN) (Elan)
today announced net income for the three month period ended June 30, 1997 of
$40.1 million and earnings per share of $0.38, compared with net income of
$28.0 million and earnings per share of $0.34 for the three month period ended
June 30, 1996. Net income and earnings per share for the six month period
ended June 30, 1997 was $77.3 million and $0.73 respectively, compared with
$56.6 million and $0.69 respectively, for the six month period ended June 30,
1996. Sales and earnings of Athena Neurosciences, Inc. (Athena) are
consolidated in current results but excluded from the prior period, following
the acquisition of Athena effective from July 1, 1996.
Product sales, which include sales from contract manufacturing for Elans
client companies and sales of products marketed directly by Elan, increased
37% to $45.7 million in the three months ended June 30, 1997 compared to $33.3
million for the three months ended June 30, 1996. The strong growth in sales
of directly marketed products over the previous year was partly offset by
reduced shipments of Naprelan and Verelan. Naprelan had benefited from the
launch quantities supplied in the second quarter of 1996 and the reduced
Verelan shipments reflected inventory adjustments and market conditions.
Research revenues increased to $14.5 million for the three months ended June
30, 1997 from $12.2 million for the three months ended June 30, 1996, an
increase of 19%. Revenue from Axogen Limited amounted to $12 million in the
second quarter, compared with revenue of $10.6 million from Advanced
Therapeutic Systems, Limited in the comparable three month period in 1996.
Royalties and fees increased to $25.7 million for the three months ended June
30, 1997 from $22.2 million for the three months ended June 30, 1996, an
increase of 16%. The increase in revenue for the quarter reflects a number of
new licence agreements and increased royalties primarily on Naprelan and
once-daily diltiazem products.
The gross margin on product sales increased from 35% in the second quarter of
1996 to 55% in the second quarter of 1997, reflecting the higher gross margin
on directly marketed products and the shipment of sample products, at lower
margins, for the launch of Naprelan in May 1996.
Selling, general and administrative expenses increased to $14.8 million for
the three months ended June 30, 1997 from $8.0 million in the three months to
June 30, 1996. This increase reflects the inclusion of Athenas marketing and
selling expenses in the current quarter. Operating income increased to $34.4
million in the second quarter of 1997 from $23.9 million in the second quarter
of 1996, an increase of 44%.
The number of weighted average common and equivalent shares increased by 29%
over the second quarter of 1996, primarily reflecting the issuance of
approximately 20 million shares in connection with the acquisition of Athena.
Elans chairman and chief executive officer, Donal J. Geaney, in reviewing the
performance for the quarter commented, The transition in Elans business from
essentially a licensing and contract manufacturing company to a specialty
biopharmaceutical company continued in the second quarter. Permax exhibited
strong growth in the second quarter, with a 29% increase in sales over the
comparable quarter of the preceding year. Just this month, we announced an
alliance with DuPont Merck to co-promote its leading Parkinsons disease
product, Sinemet CR, with Permax in the United States. Zanaflex, launched
earlier this year, continues to enjoy a successful launch curve and
promotional efforts continue to expand. Zanaflex is currently averaging 1,200
new prescriptions per week. With respect to Naprelan, an agreement was
recently announced with Wyeth-Ayerst to co-promote the product to U.S.
neurologists through the new Elan Pharma sales force. I hope that this
intensified effort will expand on Wyeths successful introduction of Naprelan
last year and continue to grow its percentage share of the non-steroidal
anti-inflammatory drug market.
Mr. Geaney further commented, With respect to Elan Pharmaceutical Technologies
(EPT), in this quarter EPT finalized and announced an agreement with
Wyeth-Ayerst for a novel formulation of Lodine using its proprietary
controlled-release delivery system, IPDAS. Other undisclosed collaborations
were signed in the quarter. The level of industry interest in EPTs platform
of drug delivery and formulation technologies continues to grow and I am
optimistic about its prospects over the next year.
Mr. Geaney concluded, Final approval for Diastat is anticipated soon and plans
continue for its launch this year. I am also pleased to report the
commencement in the quarter of Phase III clinical trials for NeuroBloc
(Botulinum Toxin Type B). Antegren entered Phase II clinical trials in the
United States for the treatment of acute exacerbations in Multiple Sclerosis
(MS). Antegren continues in Phase II clinical trials in the United Kingdom
for the MS indication and for the treatment of inflammatory bowel disease.
Elan is a leading worldwide drug delivery and biopharmaceutical company, with
its principal research and manufacturing facilities in Ireland, the United
States and Israel. Elans shares trade on the New York, London and Dublin
Stock Exchanges.
To the extent any statements made in this press release deal with information
that is not historical, these statements are necessarily forward-looking. As
such, they are subject to the occurrence of many events outside of Elans
control and are subject to various risk factors that would cause our results
to differ materially from those expressed in any forward-looking statement.
The risk factors are described in Elans reports on Form 20-F and 6K as filed
with the SEC and include, without limitation, the inherent risk of technical
product development failure, the risk of clinical outcomes, regulatory risks,
and risks related to proprietary rights, market acceptance and competition.
Consolidated Statement of Income
Three months ended June 30, Six months ended June 30,
1996 1997 1996 1997
US$000s US$000s US$000s US$000s
(unaudited) (unaudited) (unaudited) (unaudited)
33,301 45,656 Product sales 74,196 98,262
12,164 14,458 Research revenues 22,652 24,203
22,155 25,724 Royalties and fees 45,633 52,420
----------------------- -----------------------
67,620 85,838 Total Revenues 142,481 174,885
======================= =======================
Costs and Expenses
21,804 20,680 Cost of goods sold 44,235 40,721
Selling, general &
8,041 14,783 administrative 16,508 32,120
13,883 16,018 Research & development 34,544 36,145
----------------------- -----------------------
43,728 51,481 Total Operating Expenses 95,287 108,986
----------------------- -----------------------
23,892 34,357 Total Operating Income 47,194 65,899
7,006 7,051 Interest and other income 18,331 13,496
Interest and
(2,123) (1,269) similar expense (4,520) (2,096)
Share of (losses)/profits
(703) (212) of associates (4,067) 158
170 86 Minority interests (8) 103
----------------------- -----------------------
28,242 40,013 Net Income before tax 56,930 77,560
(260) 118 Taxation (331) (275)
----------------------- -----------------------
27,982 40,131 Net income 56,599 77,285
======================= =======================
Weighted average number of
ordinary and equivalent
shares outstanding
82,728 106,626 (in thousands) 82,491 105,421
Earnings per ordinary and
US$0.34 US$0.38 equivalent share US$0.69 US$0.73
Notes
Earnings per share - assuming full dilution for the three months and the six
months ended June 30, 1997 was $0.36 and $0.70, respectively. As dilution was
less the 3% in the comparable prior year periods no disclosure is required.
The share and per share numbers have been adjusted for the effect of a 2-for-1
stock split effected on August 22, 1996.
The financial statements included in this press release have been compiled in
accordance with United States generally accepted accounting principles.
Consolidated Balance Sheet as at
December 31, June 30,
1996 1997
US$000s US$000s
(audited) (unaudited)
Assets
Fixed Assets
Intangible assets 200,191 181,486
Tangible assets 100,212 103,015
Marketable investment securities 16,907 19,967
Financial assets 135,822 177,438
---------- ----------
453,132 481,906
---------- ----------
Current Assets
Inventories 25,290 29,185
Receivables, prepaid expenses and other
receivables 63,328 92,410
Marketable investment securities 152,671 123,660
Cash and cash equivalents 71,479 71,513
---------- ----------
312,768 316,768
---------- ----------
Total Assets 765,900 798,674
========== ==========
Liabilities and Shareholders Equity
Share capital 6,086 6,477
Additional paid-in capital 908,311 975,007
Unrealized gain on securities 33,584 31,420
Equity adjustment from foreign
currency translation (9,369) (16,252)
Retained deficit (427,417) (350,132)
---------- ----------
Shareholders Equity 511,195 646,520
Minority interests (40) (54)
Government grants 2,699 2,539
Accounts payable and accrued liabilities 113,781 61,850
Other loans 5,000 5,000
5.75% zero coupon subordinated
exchangeable notes 133,265 82,819
---------- ----------
Total Liabilities and Shareholders
Equity 765,900 798,674
========== ==========
Notes
The financial statements included in this press release have been compiled in
accordance with United States generally accepted accounting principles.
Contact:
Mary Bingham
Director - Investor Relations
Ph: 212-755 3218
END
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