said fourth-quarter revenue rose by nearly $17 million from last year, and the company essentially halved its loss, citing strong growth in product sales and operating margins.
Revenue for the quarter totaled $140.4 million, compared with $123.8 million in the same period a year ago. Elan lost $58.3 million, or 14 cents a share, vs. a loss of $107.1 million, or 27 cents a share, last year.
Total product sales for the fourth quarter reached $132.7 million, an increase of 30% from $102.3 million recorded in the same period of 2004, mainly because of higher sales from marketed products and improved manufacturing revenue and royalties.
Revenue from marketed products was $65.9 million in the fourth quarter, up from $51.6 million in the same period the previous year. The increase of 28% was principally a result of higher sales of Maxipime and Azactam and revenue from Prialt, launched in 2005. Having an offsetting effect was the decrease in sales of the multiple sclerosis drug Tysabri, which was pulled from the market last February.
"Back in February 2005, when we voluntarily suspended the marketing of Tysabri, we set a target of getting the rest of the business to breakeven on an EBITDA basis by the end of 2005 while not compromising revenue growth or the progress of our pipeline through the clinic," the company said. "We are pleased to report that we achieved this target, an important step in our return to profitability.
"Product revenue in the fourth quarter of 2005 grew by 30% over last year and reduced costs have led to improved operating margins and a reduction in net losses of 46% to $58.3 million while retaining cash balances in excess of $1 billion," the company continued.
Elan said it's optimistic about the return of Tysabri and plans to spend $150 million to $170 million on research and development and selling, general and administrative expenses related to the drug in 2006. The company arrived at those estimates based on the potential remarketing of Tysabri in the U.S. in the second quarter of this year and the possible launch of the drug in Europe in the second half of 2006.
Tysabri was taken off the market after being linked to a potentially life-threatening brain illness called progressive multifocal leukoencephalopathy. Elan and its marketing partner
recently completed a safety evaluation of more than 3,000 Tysabri patients in collaboration with leading experts on PML and MS. The results turned up no new confirmed cases of PML beyond the three that have been already reported.
Excluding potential revenue from Tysabri and the impact of share-based compensation, Elan expects this year's revenue to exceed $500 million, with product revenue accounting for more than 90% of the total.
Biogen and Elan have submitted a new application to the Food and Drug Administration in an effort to get Tysabri cleared again. The application has been designated for priority review, a status given to products seen as significant and that could address an unmet medical need. An FDA advisory committee plans to review the resubmission on March 7.
Elan also said it recently received a subpoena from the Justice Department and the Department of Health and Human Services asking for documents and materials mainly related to its marketing for Zonegran. The company said it will cooperate with the investigation. Elan sold its interests in Zonegran in North America and Europe to Japan's
in April 2004.