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Elan (ELN)

Q2 2012 Earnings Call

July 25, 2012 8:30 am ET


David Marshall - Vice President of Investor Relations

G. Kelly Martin - Chief Executive Officer and Executive Director

Nigel Clerkin - Chief Financial Officer and Executive Vice President


Jack Gorman - Davy, Research Division

Ian Sanderson - Cowen and Company, LLC, Research Division

Richard J. Parkes - Deutsche Bank AG, Research Division

Corey B. Davis - Jefferies & Company, Inc., Research Division

Michael J. Yee - RBC Capital Markets, LLC, Research Division

Guillaume van Renterghem - UBS Investment Bank, Research Division

Marko K. Kozul - Leerink Swann LLC, Research Division

Vincent Meunier - Exane BNP Paribas, Research Division

Marshall Urist - Morgan Stanley, Research Division



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Previous Statements by ELN
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Ladies and gentlemen, thank you for standing by, and welcome to the Elan Corporation Q2 2012 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded, Wednesday, July 25, 2012. I would now like to turn the conference over to Mr. David Marshall, Vice President, Investor Relations. Please go ahead.

David Marshall

Thank you, operator. Good morning and good afternoon, everybody. Welcome to Elan's Second Quarter 2012 Financial Results Call. If you have not reviewed our press release, please go to our website at, where you will find it. On today's call will be CEO, Kelly Martin; and CFO, Nigel Clerkin.

Before we begin, I will review Elan's Safe Harbor statement. Today's call will contain forward-looking statements about Elan's financial condition, results of operations, business and research prospects. These forward-looking statements involve substantial risks and uncertainties that could cause actual results to differ materially from those described or projected. Lists of these risks and uncertainties are included in our second quarter 2012 financial results press release and in our 2011 annual report on Form 20-F and on Forms 6-K filed with or furnished to the Securities and Exchange Commission. Elan assumes no obligation to update any forward-looking statement whether as a result of new information, future events or otherwise. In addition, today's conference call and webcast will include non-GAAP financial measures such as adjusted EBITDA. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in today's press release.

I'll now turn the call over to Kelly Martin.

G. Kelly Martin

Thanks, David. Good morning and afternoon to everybody. Thank you for joining us on the call. And on behalf of our Chairman, Bob Ingram, and myself, I'm delighted to share with you our second quarter results. As per typical, I will give a few opening comments, and then importantly, turn the call to our Chief Financial Officer, Nigel Clerkin. He'll walk you through the detail of the quarter. And then we're happy to take Q&A at the end of the call.

I'll focus my comments on 3 broad topics. First and foremost, bapineuzumab/AIP. As you all, I'm sure, have read 2 days ago, Pfizer Inc. chose to release, on a standalone basis, the results of the 302 trial. We, to remind people, are blinded to both the data and the process, so we have nothing fundamental to add to what has already been released by Pfizer, and further commented on by Johnson & Johnson. Like everybody else, we are looking forward to hearing the full results of the Study 301 trial which is the ApoE-negative patient population. And as have reported on the Pfizer announcement, we, like everyone else, would expect those data to be available soon. Further, the details around the 302 and 301 trial, as again released by Pfizer, those details will be reviewed in detail in Sweden at the EFNS meeting sometime in early September.

Second area of focus is obviously Tysabri. You'll hear more from Nigel on that. Yesterday, in the Biogen earnings call, they also reviewed a number of the important data and fundamentals. Just to highlight a few, in the second quarter of 2012, the net patient adds for Tysabri were roughly 2,400 patients. That's the largest net patient add in a quarter in over 2 years. The assay continues to be rolled out both in U.S. and rest of world. And its adoption is obviously helpful in both clinical practice and patient education. And as referred to by both Biogen, and you'll hear more -- a bit more from it from Nigel, a second-generation assay is on its way to being rolled out. And that will give -- allow for further sensitivity on measurements, which will allow for even more detailed clinical patient discussion.

The underlying fundamentals of Tysabri business appear to be strong, appear to be broad and consistent. And in some ways the underlying fundamentals of the business are running slightly ahead of the current revenue, given some of the challenges in both FX and certain areas of our rest of world/European business.

My third area of commentary, before I turn it to Nigel, is just a broad restatement of parts of our strategy. As we have done and continue to do and will continue to do, we remain resolutely focused on improving all fundamentals of our business. That includes, from a financial point of view, utilization of our balance sheet to strengthen our capital structure; working closely with Biogen on the positioning of Tysabri in its current business and exploring prudently future businesses around Tysabri; being innovative in our science area and taking a disciplined approach to different targets which may, over time, lead to clinical assets which ultimately can lead to patient and commercial assets. So our strategy remains consistent. Our focus remains the same. As we have done consistently over the last number of years, we continue to focus on providing shareholders with a value proposition that allows for upside at risk dynamics which continue to decrease as the business moves forward.

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