ELAN largest market cap on ISE

ELANs last report showed they lost $405m.


As far as I can tell, they have never made a profit (will accept if I am incorrect on that point, but dont think I am), which means their total losses throughout the years must run into billions.

Currently, at 17.74% of the ISEQ, it has largest market capitalisation of any stock on the Irish Exchange.


ELAN - 17.74%
AIB - 14.25%
CRH - 14.1%
BOI - 9.18%

I realise the prognosis (no pun intended) for the other 3 stocks isnt great, but theres just something wrong in all that.
My own opinion is that the market has been driven to extremes by sentiment and emotion - not logic.

What is odd to me is not that other stocks are taking a pounding (I can see reasons for this!), but that Elan is valued so highly!

Thats probably a better way of putting it.

Pharma’s are traditionally seen as defensive stocks in a down turn, as people (or governments) will always pay for their medication.

That said, the Irish financials and building stocks have been (IMHO) rightly pounded of late.

Blue Horseshoe

True, but pharmas traditionally make billions - not lose them.

Elan is the context in which I put my prediction of the ISEQ halving this year… I don’t see either that its valuation is justified or that the price won’t tank one there is no longer a short squeeze on the share price.

Isn’t that pharma’s that actually have drugs they can sell though…???

At least they export something.

Elan’s share price rests on the hopes of future profits from one or two drugs they are developing. One, which is on the market is a treatment for multiple sclerosis. It has a rare but serious side effect that may limit its use.
The other and probably the most influence on the recent run up in the share price is a possible treatment for alzheimer’s disease. Obviously this would be an enormous money spinner but there’s a long way to go before it comes to market.
I would see elan as a lottery ticket. Relatively small chance of huge profits versus more likely chance of losses. They do not have a big portfolio of drugs in the pipeline. If these two don’t work out I would see the price falling significantly.
The main point though should be that the ISEQ is not adequately diversified . AT 15% that’s too much for such a volatile stock(but perhaps the overconcentration in banks/Builders has already made that point).

That’s dotcom economics still going strong.

Last year every euro of revenue cost them 48c

This year higher revenues meant bigger losses, and as if that wasn’t bad enough, the cost of a euro of revenue has increased to 53c

Yep, that sounds about right for the Irish economy at the moment.


Elan currently forecast that they will have 100,000 patients on Tysabri by 2010 and going by their current weekly run rate they should exceed this slightly.
They pulled Tysabri when it caused 3 deaths in patients which had been prescribed it along with Avonex, the drug which their partner’s Biogen had been using on MS sufferers previously. All patients (2 MS and 1 crohns) had poor immune systems due to the cocktails of drugs they were on. Since it has been re-instated as a mono therapy it was expected that it would cause 1 death in every 1000 cases, even when it was being administered in clinicals where only suitable patients would be allowed it and would be monitored very closely under the TOUCH program.
Since it’s reinstatment 2 years ago there are now just under 30,000 patients on it, who have made major progress against MS and there has not been a single occurance of PML in any of these cases.
It is now approaching it’s two year anniversary of being reinstated which analysts believe will convince more doctors of it’s safety profile and they believe that this could help accelerate the uptake.
As for Bap the Alzheimers drug, in the recent PhaseII trials it showed staticial significance in the treatment against the Alz plague build ups against a type of plaque found in 40% of the alz population, specifics out at the end of the month. While there is a very long journey ahead, it is currently the closest to market of any Alz drug which targets the disease instead of just the symptoms.

Elan by the nature of a Bio stock is very risky. If Tysabry killed someone in the morning, the stock could half at open, but I wouldn’t call it a lottery ticket either. They are due to go CFBE this year when Tysabri finally pays for its own production and are thinking about spinning off their nano drug delivery where could be big in the future. They have come a long way since 2002 and I’m very happy with the current progress as a shareholder. (Sometimes it’s best not to follow the SP to closely though :wink: , bad for the heart)

Do they have a shareholder discount for any of their products?


You clearly know your stuff. I’m not a shareholder(was in the past).
My main point would be that this is not a defensive big pharma name but rather a high risk/high return stock dependent on the success of one or two product lines.

**FB2 wrote:

YEP, nano drug delivery has a massive future when it is fully developed and that can’t be too far away.
The faster it is developed the better as every second person seems to be dying of cancer nowadays.

Not that I know of. If they ever take over a jocks factory though I’ll take the dividend in product. There have been some down right bad days in the past and I’m sure they are not over yet. I was lucky enough to get in when they went very very low but for a long time it looked like they would fold if they couldn’t refinance the 2011 debt and Ty was not re instated. Even a couple of thousand shares at €0 = €0. I did take a few quid off the table on two occasions so while I don’t have as many shares now, I do have a nice wedge of cash in the bank because of them. If they tank, I won’t be out of pocket. If they do well, it will give me a nicer LTV in 2010 so I’m happy enough.
Enjoy the weekend all. Time for road.

Fully agree with you DD. Not for the faint hearted, there are people out there who have whole fortunes bet on Elan, that’s gambling, not investing. Even back when I had a lot of shares they started as a balanced portion of my portfolio.

The main reason Elan collapsed y’day was that is had been massively overbought over the last few months
At one point a few weeks ago it was worth the same as Biogen, which is hard to justify considering Biogen also owns 50% of Tysabri with Elan and outside of Tysabri Biogen has a much safer, more established and broader pipeline than Elan

The only reason for buying Elan and not Biogen at that point was if one assigned a 100% probability to the Alzeimers drug becoming a blockbuster

Today maybe Elan is a little oversold (now worth 50% of Biogen), but naturally the market has to clean out the optimists who bought it last week when it was priced for perfection

Any purchase of ELN now is a bet that there are no more PML cases with Tysabri. For me, it is in 40 foot bargepole territory until it gets to single digits at least.

Says a lot about the Irish Exchange and current market conditions when one of the largest listed companys’ is, in effect, a punt stock.