RNS No 4432v
ELAN CORPORATION PLC
21st October 1997
ELAN ANNOUNCES THIRD QUARTER 1997 RESULTS
INCREASE IN NET INCOME OF 62% AND EARNINGS PER SHARE OF 45%
DUBLIN, IRELAND, October 21, 1997 - - Elan Corporation, plc (NYSE: ELN)
("Elan") today announced net income for the quarter ended September 30, 1997
of $46.1 million and earnings per share of $0.42, compared with net income and
earnings per share before one-time charges of $28.5 million of $0.29 for the
three months ended September 30, 1996. Net income and earnings per share for
the nine month period ended September 30, 1997 were $123.4 million and $1.15,
respectively, compared with net income and earnings per share before one-time
charges of $85.1 million and $0.97 for the nine month period ended September
30, 1996. This is the first quarter in which the sales and earnings of Athena
Neurosciences, Inc. ("Athena") have been consolidated in both the current and
comparative periods following the July 1, 1996 acquisition of Athena.
Product sales, which include sales from contract manufacturing for Elans
client companies and sales of products marketed directly by Elan, increased
46% to $54.9 million in the three months ended September 30, 1997, compared to
$37.6 million for the three months ended September 30, 1996. This increase
was due to strong growth in sales of directly marketed products. The quarter
included the delivery of launch quantities of two products (including Diastat
(diazepam rectal gel) which will be directly marketed by Elan).
Research revenues increased to $18.4 million for the three months ended
September 30, 1997 from $18.2 million for the three months ended September 30,
1996, an increase of 1%. Revenue from Axogen Limited amounted to $9.8 million
in the third quarter of 1997, compared with revenue of $15.4 million from
Advanced Therapeutic Systems, Limited in the comparable
three month period in 1996.
Royalties and fees increased to $31.6 million for the three months ended
September 30, 1997 from $27.5 million for the three months ended September 30,
1996, an increase of 15%. The increase in revenue for the quarter reflects a
number of new licence agreements and increased royalties on licensed products,
primarily once-daily diltiazem products.
The gross margin on product sales decreased from 43.2% in the third quarter of
1996 to 39.4% in the third quarter of 1997, reflecting primarily the cost of
set-up of new products and certain one-time low margin sales offset, in part,
by the higher gross margin on directly marketed products.
Selling, general and administrative expenses increased to $18.7 million for
the three months ended September 30, 1997 from $15.2 million in the three
months to September 30, 1996. This increase reflects a significant expansion
of the direct selling force in the United States. Operating income increased
to $30.9 million in the third quarter of 1997 from $25.1 million in the third
quarter of 1996, an increase of 23%. Interest and other income for the
quarter included realised portfolio profits of $6 million.
The number of weighted average common and equivalent shares increased by 11%
over the third quarter of 1996, primarily reflecting the conversion of zero
coupon subordinated exchangeable notes and the effect of the increase in Elans
share price which brought additional common stock equivalents into the
computation.
Elans chairman and chief executive officer, Donal J. Geaney, commented, "I
believe these results emphasise the success of the strategy which led to the
acquisition of Athena in 1996. I am pleased that we have overcome the
dilutive effect of that acquisition and have delivered growth in earnings per
share of 45% for the most recent quarter."
Significant recent achievements included:
* U.S. approval to market and the launch of Diastat for the adjunctive
treatment of certain types of cluster seizures in patients with
epilepsy;
* U.S. approval to market Carbatrol (carbamazepine extended-release
capsules) for the treatment of epilepsy and trigeminal neuralgia;
* agreement with the Wyeth-Ayerst division of American Home Products
Corporation to co-promote Naprelan (naproxen sodium controlled-release
tablets) in the U.S. to neurologists;
* commencement of both Phase III clinical trials for Neurobloc (Botulinum
Toxin Type B) and construction of a manufacturing facility for the drug;
* conclusion of collaborative arrangements with CombiChem, Inc. (for the
discovery of novel therapeutic compounds for treatment of central
nervous system conditions); with RTP Pharma Inc. (for the development
of novel formulations of cyclosporine) and with Bioject Medical
Technologies Inc. (for the development of a glucose monitoring device);
and
* the launch in the United Kingdom of Zanaflex (tizanidine
hydrochloride) (for the treatment of spasticity associated with multiple
sclerosis or spinal cord injury or disease).
In separate announcements, Elan reported two transactions designed to
establish and consolidate its direct pharmaceutical business in the United
Kingdom and Ireland and that it has called the 5.75% zero coupon subordinated
exchangeable notes for redemption.
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.
The statements made in this press release may include forward-looking
statements that involve risks and uncertainties including, the success and
timing of regulatory approvals, the degree of market acceptance and pricing,
as well as the other risks and uncertainties detailed from time to time in
periodic reports including Elans reports on Form 6-K and Form 20-F for the
period ended December 31, 1996 filed with the Securities and Exchange
Commission. Actual results may differ from the forward-looking statements.
Elan Corporation, plc
Consolidated Statement of Income
Consolidated Statement of Income
Three months ended September 30, Nine months ended September 30,
1996 1997 1996 1997
US$000s US$000s Revenues US$000s US$000s
37,602 54,892 Product sales 111,798 153,154
18,206 18,378 Research revenues 40,858 42,579
27,511 31,605 Royalties and fees 73,144 84,027
----------------------- -----------------------
83,319 104,875 Total Revenues 225,800 279,760
======================= =======================
Costs and Expenses
21,366 33,251 Cost of goods sold 65,601 73,972
Selling, general &
15,203 18,744 administrative 31,711 50,864
21,620 21,960 Research & development 56,164 58,105
----------------------- -----------------------
58,189 73,955 Total Operating Expenses 153,476 182,941
----------------------- -----------------------
25,130 30,920 Total Operating Income 72,324 96,819
7,731 17,081 Interest and other income 26,062 30,577
Interest and
(2,069) (958) similar expense (6,589) (3,054)
Share of losses of
(2,295) (556) of associates (6,362) (398)
168 67 Minority interests 162 169
----------------------- -----------------------
28,665 46,554 Net Income before tax 85,597 124,113
and one-time charges
(185) (472) Taxation (516) (747)
----------------------- -----------------------
28,480 46,082 Net Income before one- 85,081 123,366
time charges
(484,851) - One-time charges (484,851) -
----------------------- -----------------------
(456,371 46,082 Net (loss)/income (399,770) 123,366
======================= =======================
Weighted average number of
ordinary and equivalent
shares outstanding
99,727 110,881 (in thousands) 88,016 107,304
Earnings per ordinary and
equivalent share before
US$0.29 US$0.42 one-time charges US$0.97 US$1.15
Earnings per ordinary and
equivalent share after
(US$4.58) US$0.42 one-time charges (US$4.54) US$1.15
Notes
The financial statements included in this press release have been compiled in
accordance with United States generally accepted accounting principles.
Results for the three month and nine month periods ended September 30, 1996
and 1997 have not been audited.
Consolidated Balance Sheet as at
December 31, September 30,
1996 1997
US$000s US$000s
(audited) (unaudited)
Assets
Fixed Assets
Intangible assets 200,191 178,456
Tangible assets 100,212 109.303
Marketable investment securities 16,907 -
Financial assets 79,376 86,576
---------- ----------
396,686 374,335
---------- ----------
Current Assets
Inventories 25,290 30,168
Receivables, prepaid expenses and other
receivables 63,328 101,678
Marketable investment securities 209,117 286,219
Cash and cash equivalents 71,479 48,753
---------- ----------
369,214 466,818
---------- ----------
Total Assets 765,900 841,153
========== ==========
Liabilities and Shareholders Equity
Share capital 6,086 6,507
Additional paid-in capital 908,311 987,464
Unrealized gain (net) on securities 33,584 49,004
Equity adjustment from foreign
currency translation (9,369) (24,528)
Retained deficit (427,417) (304,051)
---------- ----------
Shareholders Equity 511,195 714,396
Minority interests (40) (159)
Government grants 2,699 2,474
Accounts payable and accrued liabilities 113,781 48,875
Other loans 5,000 -
5.75% zero coupon subordinated
exchangeable notes 133,265 75,567
---------- ----------
Total Liabilities and Shareholders
Equity 765,900 841,153
========== ==========
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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