Elan Misses 1Q EPS, Revenues Rise - Analyst Blog
May 01 2012 - 4:45AM
Zacks
Elan Corporation’s (ELN) loss of 3 cents per
share (excluding special items) for the first quarter of 2012 was
broader than the Zacks Consensus Estimate of 2 cents per share but
narrower the loss of 5 cents per share (excluding special items) in
the year-ago period. Increased revenues helped reduce loss during
the quarter.
First quarter 2012 revenues increased 16.7% from the year-ago
figure to $288.4 million. The Zacks Consensus Estimate was $286
million. The increase was primarily attributable to strong Tysabri
sales.
Quarter in Details
In-market net sales of Tysabri climbed 14.2% to $399 million in
the reported quarter. The increase was driven by increased global
demand and higher price in the US market. The sales of Tysabri
recorded by Elan rose 17.5% to $288.2 million.
We note that Elan has a co-development agreement with
Biogen Idec Inc. (BIIB) for Tysabri, under which
Elan markets the drug in the US and books the entire sales as its
revenues.
Outside the US, Biogen is responsible for distribution, and Elan
records as revenue its share of the profit/loss on these sales of
Tysabri. The agreement provides Elan with the option to buy the
rights of Tysabri if Biogen changes hands.
During the reported quarter, selling, general and administrative
(SG&A) expenses increased 25.7% to $60.1 million, reflecting
higher Tysabri marketing expenses. Research and development
(R&D) expenses came in at $49 million, up 2.9% from the
year-ago quarter.
Outlook Reaffirmed
Elan said that the company is on-track to attain the full-year
guidance announced earlier. Elan expects 2012 revenues to be in the
range of $1.20 billion – $1.25 billion. The Zacks Consensus
Estimate of $1.23 billion is within the company’s guidance
range.
Gross profit margin is expected to be in the range of 44%–47% of
total revenues. Combined SG&A and R&D expenses for 2012 are
projected in the range of $420 - $440 million.
Our Recommendation
We currently have a Neutral recommendation on Elan. The stock
carries a Zacks #3 Rank (Hold rating) in the short run.
BIOGEN IDEC INC (BIIB): Free Stock Analysis Report
ELAN CP PLC ADR (ELN): Free Stock Analysis Report
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