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Elan Reports Third Quarter 2012 Financial Results

Neotope Separation

As further described on page 16, in August 2012, Elan announced its intention to separate a substantial portion of its drug discovery business platform, which is referred to as the “Neotope business”, into a new, publicly traded company incorporated in Ireland. We expect to complete this transaction by year-end 2012. The Neotope business focuses on the discovery and development of novel antibodies for the potential treatment of a broad range of diseases that involve protein misfolding or cell adhesion.

Following the Neotope separation, Elan intends to discontinue its remaining early stage research activities. As a result, Elan is restructuring its operations and will close its South San Francisco facility in early 2013. During the third quarter of 2012, Elan incurred $100.3 million of other charges in connection with the restructuring, primarily consisting of employee severance costs and asset impairment charges (see page 13).

Debt Refinancing

Following the completion of the debt refinancing transactions in October 2012, as further described on page 14, the principal amount of Elan’s debt has been reduced from $624.5 million at September 30, 2012, to $600.0 million on a pro forma basis, the coupon has decreased from 8.75% to 6.25% and the maturity of the debt has been extended by approximately three years from October 2016 to October 2019. The effects of this debt refinancing will be reflected in the fourth quarter 2012 results.

Total Revenue

For the third quarter of 2012, revenue increased by 10% to $306.6 million from $279.4 million for the third quarter of 2011. For the nine months ended September 30, 2012, revenue increased by 11% to $883.0 million from $797.1 million for the same period of 2011.
Three Months Ended     Nine Months Ended
September 30 September 30
2011   2012 2011   2012
US$m   US$m       US$m   US$m
Product revenue
197.1 230.5 Tysabri – U.S. 550.1 643.0
81.9 75.9 Tysabri – ROW 243.4 240.0
279.0 306.4 Total Tysabri 793.5 883.0
0.1 Maxipime 0.8
0.1 Azactam 0.5 (0.5)
0.2 0.2 Royalties 2.3 0.5
279.4 306.6 Total revenue 797.1 883.0


Global in-market net sales of Tysabri can be analyzed as follows:
Three Months Ended     Nine Months Ended
September 30 September 30
2011   2012 2011   2012
US$m   US$m       US$m   US$m
197.1 230.5 United States 550.1 643.0
195.5 173.3 ROW 580.9 555.3
392.6 403.8 Total Tysabri in-market net sales 1,131.0 1,198.3

At the end of September 2012, approximately 71,100 patients were on therapy worldwide, including approximately 32,900 commercial patients in the United States and approximately 37,400 commercial patients in the ROW, representing a 3% increase over the approximately 69,000 patients (revised) who were on therapy at the end of June 2012, and 13% over the approximately 63,200 patients (revised) who were on therapy at the end of September 2011.

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