Elan Reports Record First Quarter 2001 Financial Results

Total Revenue up 27%



Product Revenue up 39%



Diluted Per Share Income Before Other Charges

of 41 Cents for the Quarter an Increase of 71%



Apr 23, 2001, 01:00 ET from Elan Corporation, plc

    DUBLIN, Ireland, April 23 /PRNewswire/ -- Elan Corporation, plc
 (NYSE:   ELN) ("Elan") today announced net income for the first quarter of 2001
 of $144.4 million and $0.41 per diluted share, excluding other charges,
 compared to net income of $76.5 million and $0.24 per diluted share, excluding
 other charges, for the first quarter of 2000, representing increases of 89%
 and 71%, respectively.
     Revenue increased from $337.9 million in the first quarter of 2000 to
 $429.3 million in the first quarter of 2001, an increase of 27%, reflecting an
 increase of 39% in product revenue to $324.1 million.  Contract revenue for
 the first quarter of 2001 of $105.3 million was consistent with the level
 achieved in the first quarter of 2000.  Product revenue accounted for 75% of
 total revenue in the first quarter of 2001 compared to 69% in the comparable
 quarter of 2000.  The gross margin on product revenue improved to 72% in the
 first quarter of 2001 compared to 68% in the comparable quarter of 2000.
     Commenting on the results, Donal J. Geaney, Elan's chairman and chief
 executive officer said, "I am pleased with the performance of the business in
 the first quarter of 2001.  The significant growth in product revenue and the
 expansion in the gross margin reflect the continuing transformation of the
 company to a fully integrated pharmaceutical company.  The three largest
 products -- Zanaflex(TM), for spasticity, Skelaxin(TM), for muscular pain and
 Abelcet(TM), for fungal infections, all performed in line with our
 expectations for the first quarter of 2001 and we remain confident in our
 expectation of recording revenue in excess of $100 million for each product in
 fiscal 2001.
     "I am also pleased to report that we have made considerable progress in
 integrating our North American pharmaceutical business following the merger
 with Dura Pharmaceuticals, Inc. ('Dura') in the fourth quarter of 2000.
 During the first quarter of 2001, we announced the new management structure
 for the business, realigned the sales force into four business units focused
 on primary care, acute care, neurology and specialty areas, and commenced the
 implementation of our integration plan which we expect to generate $50 million
 in full-year operating expense synergies.  The reorganisation of our sales
 force will allow the business to focus its marketing efforts on the key growth
 products.
     "Myobloc(TM), our botulinum toxin type B, for the treatment of cervical
 dystonia, was launched late in the fourth quarter of 2000 in the US, and early
 in the first quarter of 2001 in several key European markets under the name
 NeuroBloc(TM).  We believe that the product is on target to meet our
 expectations for 2001.  In addition, Zonegran(TM), our anti-epileptic
 introduced in 2000, showed strong prescription growth in the first quarter of
 the year and we also expect this product to meet our expectations for 2001.
     "We have made significant progress in our clinical development efforts
 during the quarter.  In January, Elan and our partner Biogen, Inc. announced
 positive results in two large Phase II clinical studies with Antegren(TM)
 (natalizumab) in multiple sclerosis and Crohn's disease.  We anticipate that
 Phase III studies in both indications will be initiated in 2001.  We also
 continued to progress our Alzheimer's disease candidate (AN-1792), which is
 being developed in collaboration with American Home Products Corporation,
 through Phase I clinical development.
     "Finally, following the repayment in cash of approximately $224.9 million
 of the 3.5% convertible subordinated notes in December 2000, and the
 conversion of approximately $324.7 million of the 4.75% exchangeable notes in
 March 2001, we strengthened our cash resources through the issuance of
 $650 million in seven year 7.25% senior guaranteed unsecured notes during the
 quarter," Mr. Geaney concluded.
     Research and development expenses were $74.0 million in the first quarter
 of 2001, compared to $86.0 million in the first quarter of 2000.  The
 reduction reflects lower clinical trial costs and lower expenditure on
 programmes previously funded by Dura, the costs of which were offset by
 research revenue.  Selling, general and administrative expenses increased by
 26% to $149.9 million in the first quarter of 2001, reflecting the
 consolidation of The Liposome Company, Inc. (acquired in May 2000), the
 acquisition of certain dermatology products in the fourth quarter of 2000, and
 increased marketing expenses associated with Zonegran and Myobloc, which were
 launched in the second quarter of 2000 and at the end of the fourth quarter of
 2000, respectively.
     Operating income in the first quarter of 2001 increased 94% to
 $116.2 million compared to $59.8 million in 2000, reflecting strong revenue
 growth, the improved gross margin on product revenue and lower research and
 development expenses.
     Net income after taxes and before other charges in the first quarter of
 2001 increased 89% to $144.4 million compared to $76.5 million in the first
 quarter of 2000, reflecting growth in product revenue and the improved gross
 margin on product revenue.
     In the first quarter of 2001, Elan incurred a non-recurring charge of
 $68.0 million following the completion of its merger with Dura in 2000.  This
 merger was accounted for using the "pooling of interests" method and,
 accordingly, prior periods have been adjusted to reflect the revenues, results
 and assets and liabilities of Dura.
 
     Primarily reflecting this merger and related matters the non-recurring
 charge for the quarter can be analysed as follows:
 
      Item description                           (dollars, in millions)
      Integration and rationalisation charges             32.9
      Asset write-off and other                           17.9
      Severance                                           17.2
      Total                                               68.0
 
     In 2000, Elan implemented the SEC's Staff Accounting Bulletin No. 101
 ("SAB 101"), which requires certain initial fees to be deferred and amortized
 over future periods.  As a result of the implementation of SAB 101, certain
 initial fees recognized in prior periods have been deferred and are being
 amortized over the terms of the relevant agreements.  In the first quarter of
 2000, Elan recorded a charge of $344.0 million for the cumulative effect
 (i.e., for the period to December 31, 1999) of this accounting change relating
 to fee income recognized in prior years.  Previously reported results for the
 first quarter of 2000 now reflect the implementation of SAB 101.
 
     Elan is a leading worldwide fully integrated pharmaceutical company
 headquartered in Ireland, with its principal research, development,
 manufacturing and marketing facilities located in Ireland, the United States
 and Israel.  Elan is focused on the discovery, development and marketing of
 therapeutic products and services in neurology, pain management, oncology,
 infectious disease and dermatology and on the development and
 commercialization of products using its extensive range of proprietary drug
 delivery technologies.  Elan shares trade on the New York, London and Dublin
 Stock Exchanges.
 
     This communication includes certain "forward-looking statements" within
 the meaning of the Private Securities Litigation Reform Act of 1995.  These
 statements are based on management's current expectations but actual results
 may vary materially due to various factors.  The forward-looking statements in
 this communication include statements about future operating results.  Certain
 factors, including Elan's inability to successfully integrate the acquired
 companies, attain milestone payments, develop products, gain approvals, launch
 and market its products and other economic, competitive, business and/or
 regulatory factors affecting Elan's business generally, could cause actual
 results to differ materially from those described herein.  More detailed
 information about these factors is set forth in Elan's filings with the
 Securities and Exchange Commission, including Elan's Annual Report on Form
 20-F for the fiscal year ended December 31, 1999.  Elan is under no obligation
 to (and expressly disclaims any obligation to) update or alter these
 forward-looking statements, whether as a result of new information, future
 events or otherwise.
 
 
                             Elan Corporation, plc
                        Consolidated Statement of Income
                          Three months ended March 31,
 
     Revenue                                             2000           2001
                                                      US$000s        US$000s
 
     Product revenue                                  232,399        324,087
     Contract revenue                                 105,488        105,258
     Total revenue                                    337,887        429,345
 
     Costs and Expenses
     Research & development                            86,036         74,002
     Cost of goods sold                                73,306         89,202
     Selling, general & administrative                118,764        149,923
 
     Total operating expenses                         278,106        313,127
 
     Total operating income                            59,781        116,218
     Interest and other income (net)                   19,221         31,516
     Net income before tax and other charges           79,002        147,734
     Taxation                                          (2,515)        (3,328)
     Net income before other charges                   76,487        144,406
     Other charges                                         --        (68,010)
     Cumulative effect of accounting change          (343,998)            --
 
     Net (loss)/income after other charges           (267,511)        76,396
 
     Weighted average number of ordinary
      shares outstanding (in thousands)               299,066        327,608
 
     Diluted earnings per ordinary share before
      other charges and accounting change               $0.24          $0.41
 
     Diluted earnings per ordinary share after
      other charges and accounting change              ($0.89)         $0.22
 
 
                             Elan Corporation, plc
                           Consolidated Balance Sheet
 
                                                        As at          As at
                                                  December 31,      March 31,
                                                         2000           2001
     Assets                                             $000s          $000s
     Current Assets
     Cash and marketable investment securities      1,161,233      1,573,916
     Other current assets                             495,738        504,428
                                                    1,656,971      2,078,344
 
     Intangible assets                              1,999,887      2,003,287
     Property, plant and equipment                    353,542        356,376
     Investments and marketable
      investment securities                           642,600        781,871
     Total Assets                                   4,653,000      5,219,878
 
     Liabilities and Shareholders' Equity
     Shareholders' Equity                           2,276,891      2,693,279
     Accounts payable and accrued liabilities       1,067,475        885,216
     4.75% exchangeable notes                         324,725             --
     7.25% senior notes                                    --        650,000
     3.25% zero coupon subordinated
      exchangeable notes                              921,273        928,747
     3.5% convertible subordinated notes               62,636         62,636
     Total Liabilities and Shareholders' Equity     4,653,000      5,219,878
 
 

SOURCE Elan Corporation, plc
    DUBLIN, Ireland, April 23 /PRNewswire/ -- Elan Corporation, plc
 (NYSE:   ELN) ("Elan") today announced net income for the first quarter of 2001
 of $144.4 million and $0.41 per diluted share, excluding other charges,
 compared to net income of $76.5 million and $0.24 per diluted share, excluding
 other charges, for the first quarter of 2000, representing increases of 89%
 and 71%, respectively.
     Revenue increased from $337.9 million in the first quarter of 2000 to
 $429.3 million in the first quarter of 2001, an increase of 27%, reflecting an
 increase of 39% in product revenue to $324.1 million.  Contract revenue for
 the first quarter of 2001 of $105.3 million was consistent with the level
 achieved in the first quarter of 2000.  Product revenue accounted for 75% of
 total revenue in the first quarter of 2001 compared to 69% in the comparable
 quarter of 2000.  The gross margin on product revenue improved to 72% in the
 first quarter of 2001 compared to 68% in the comparable quarter of 2000.
     Commenting on the results, Donal J. Geaney, Elan's chairman and chief
 executive officer said, "I am pleased with the performance of the business in
 the first quarter of 2001.  The significant growth in product revenue and the
 expansion in the gross margin reflect the continuing transformation of the
 company to a fully integrated pharmaceutical company.  The three largest
 products -- Zanaflex(TM), for spasticity, Skelaxin(TM), for muscular pain and
 Abelcet(TM), for fungal infections, all performed in line with our
 expectations for the first quarter of 2001 and we remain confident in our
 expectation of recording revenue in excess of $100 million for each product in
 fiscal 2001.
     "I am also pleased to report that we have made considerable progress in
 integrating our North American pharmaceutical business following the merger
 with Dura Pharmaceuticals, Inc. ('Dura') in the fourth quarter of 2000.
 During the first quarter of 2001, we announced the new management structure
 for the business, realigned the sales force into four business units focused
 on primary care, acute care, neurology and specialty areas, and commenced the
 implementation of our integration plan which we expect to generate $50 million
 in full-year operating expense synergies.  The reorganisation of our sales
 force will allow the business to focus its marketing efforts on the key growth
 products.
     "Myobloc(TM), our botulinum toxin type B, for the treatment of cervical
 dystonia, was launched late in the fourth quarter of 2000 in the US, and early
 in the first quarter of 2001 in several key European markets under the name
 NeuroBloc(TM).  We believe that the product is on target to meet our
 expectations for 2001.  In addition, Zonegran(TM), our anti-epileptic
 introduced in 2000, showed strong prescription growth in the first quarter of
 the year and we also expect this product to meet our expectations for 2001.
     "We have made significant progress in our clinical development efforts
 during the quarter.  In January, Elan and our partner Biogen, Inc. announced
 positive results in two large Phase II clinical studies with Antegren(TM)
 (natalizumab) in multiple sclerosis and Crohn's disease.  We anticipate that
 Phase III studies in both indications will be initiated in 2001.  We also
 continued to progress our Alzheimer's disease candidate (AN-1792), which is
 being developed in collaboration with American Home Products Corporation,
 through Phase I clinical development.
     "Finally, following the repayment in cash of approximately $224.9 million
 of the 3.5% convertible subordinated notes in December 2000, and the
 conversion of approximately $324.7 million of the 4.75% exchangeable notes in
 March 2001, we strengthened our cash resources through the issuance of
 $650 million in seven year 7.25% senior guaranteed unsecured notes during the
 quarter," Mr. Geaney concluded.
     Research and development expenses were $74.0 million in the first quarter
 of 2001, compared to $86.0 million in the first quarter of 2000.  The
 reduction reflects lower clinical trial costs and lower expenditure on
 programmes previously funded by Dura, the costs of which were offset by
 research revenue.  Selling, general and administrative expenses increased by
 26% to $149.9 million in the first quarter of 2001, reflecting the
 consolidation of The Liposome Company, Inc. (acquired in May 2000), the
 acquisition of certain dermatology products in the fourth quarter of 2000, and
 increased marketing expenses associated with Zonegran and Myobloc, which were
 launched in the second quarter of 2000 and at the end of the fourth quarter of
 2000, respectively.
     Operating income in the first quarter of 2001 increased 94% to
 $116.2 million compared to $59.8 million in 2000, reflecting strong revenue
 growth, the improved gross margin on product revenue and lower research and
 development expenses.
     Net income after taxes and before other charges in the first quarter of
 2001 increased 89% to $144.4 million compared to $76.5 million in the first
 quarter of 2000, reflecting growth in product revenue and the improved gross
 margin on product revenue.
     In the first quarter of 2001, Elan incurred a non-recurring charge of
 $68.0 million following the completion of its merger with Dura in 2000.  This
 merger was accounted for using the "pooling of interests" method and,
 accordingly, prior periods have been adjusted to reflect the revenues, results
 and assets and liabilities of Dura.
 
     Primarily reflecting this merger and related matters the non-recurring
 charge for the quarter can be analysed as follows:
 
      Item description                           (dollars, in millions)
      Integration and rationalisation charges             32.9
      Asset write-off and other                           17.9
      Severance                                           17.2
      Total                                               68.0
 
     In 2000, Elan implemented the SEC's Staff Accounting Bulletin No. 101
 ("SAB 101"), which requires certain initial fees to be deferred and amortized
 over future periods.  As a result of the implementation of SAB 101, certain
 initial fees recognized in prior periods have been deferred and are being
 amortized over the terms of the relevant agreements.  In the first quarter of
 2000, Elan recorded a charge of $344.0 million for the cumulative effect
 (i.e., for the period to December 31, 1999) of this accounting change relating
 to fee income recognized in prior years.  Previously reported results for the
 first quarter of 2000 now reflect the implementation of SAB 101.
 
     Elan is a leading worldwide fully integrated pharmaceutical company
 headquartered in Ireland, with its principal research, development,
 manufacturing and marketing facilities located in Ireland, the United States
 and Israel.  Elan is focused on the discovery, development and marketing of
 therapeutic products and services in neurology, pain management, oncology,
 infectious disease and dermatology and on the development and
 commercialization of products using its extensive range of proprietary drug
 delivery technologies.  Elan shares trade on the New York, London and Dublin
 Stock Exchanges.
 
     This communication includes certain "forward-looking statements" within
 the meaning of the Private Securities Litigation Reform Act of 1995.  These
 statements are based on management's current expectations but actual results
 may vary materially due to various factors.  The forward-looking statements in
 this communication include statements about future operating results.  Certain
 factors, including Elan's inability to successfully integrate the acquired
 companies, attain milestone payments, develop products, gain approvals, launch
 and market its products and other economic, competitive, business and/or
 regulatory factors affecting Elan's business generally, could cause actual
 results to differ materially from those described herein.  More detailed
 information about these factors is set forth in Elan's filings with the
 Securities and Exchange Commission, including Elan's Annual Report on Form
 20-F for the fiscal year ended December 31, 1999.  Elan is under no obligation
 to (and expressly disclaims any obligation to) update or alter these
 forward-looking statements, whether as a result of new information, future
 events or otherwise.
 
 
                             Elan Corporation, plc
                        Consolidated Statement of Income
                          Three months ended March 31,
 
     Revenue                                             2000           2001
                                                      US$000s        US$000s
 
     Product revenue                                  232,399        324,087
     Contract revenue                                 105,488        105,258
     Total revenue                                    337,887        429,345
 
     Costs and Expenses
     Research & development                            86,036         74,002
     Cost of goods sold                                73,306         89,202
     Selling, general & administrative                118,764        149,923
 
     Total operating expenses                         278,106        313,127
 
     Total operating income                            59,781        116,218
     Interest and other income (net)                   19,221         31,516
     Net income before tax and other charges           79,002        147,734
     Taxation                                          (2,515)        (3,328)
     Net income before other charges                   76,487        144,406
     Other charges                                         --        (68,010)
     Cumulative effect of accounting change          (343,998)            --
 
     Net (loss)/income after other charges           (267,511)        76,396
 
     Weighted average number of ordinary
      shares outstanding (in thousands)               299,066        327,608
 
     Diluted earnings per ordinary share before
      other charges and accounting change               $0.24          $0.41
 
     Diluted earnings per ordinary share after
      other charges and accounting change              ($0.89)         $0.22
 
 
                             Elan Corporation, plc
                           Consolidated Balance Sheet
 
                                                        As at          As at
                                                  December 31,      March 31,
                                                         2000           2001
     Assets                                             $000s          $000s
     Current Assets
     Cash and marketable investment securities      1,161,233      1,573,916
     Other current assets                             495,738        504,428
                                                    1,656,971      2,078,344
 
     Intangible assets                              1,999,887      2,003,287
     Property, plant and equipment                    353,542        356,376
     Investments and marketable
      investment securities                           642,600        781,871
     Total Assets                                   4,653,000      5,219,878
 
     Liabilities and Shareholders' Equity
     Shareholders' Equity                           2,276,891      2,693,279
     Accounts payable and accrued liabilities       1,067,475        885,216
     4.75% exchangeable notes                         324,725             --
     7.25% senior notes                                    --        650,000
     3.25% zero coupon subordinated
      exchangeable notes                              921,273        928,747
     3.5% convertible subordinated notes               62,636         62,636
     Total Liabilities and Shareholders' Equity     4,653,000      5,219,878
 
 SOURCE  Elan Corporation, plc