IRISH DRUGS firm Elan has halved its second-quarter loss as revenues grew 30 per cent to $245.6 million (€156.9 million) in the quarter.

Net losses in the three months to June 30th fell to $71.5 million from $141.1 million for the same period in 2007.

Revenues grew 30 per cent in the quarter, boosted by strong sales of its multiple sclerosis (MS) drug, Tysabri. Sales of the drug totalled $200 million in the second quarter, up from $160 million in the first quarter and up almost 178 per cent on the second quarter of last year.

Elan, which shares revenues from Tysabri with Biogen, received $133.7 million of the $200 million the drug generated in the quarter.

Usage of Tysabri, which recently celebrated its second anniversary, continues to accelerate, with about 31,800 patients taking it worldwide. "We are confident it will reach blockbuster status on a run-rate basis in the coming months and our target is 100,000 patients on therapy by the end of 2010," said Shane Cooke, Elan's executive vice-president and chief financial officer.

The continued acceleration in the growth of Tysabri, coupled with reduced expenses in sales, administration and general operations, helped offset the loss of sales of its Maximpime drug due to generic competition as well as increased investment in research and development, said Mr Cooke.

"We remain on track to record adjusted earnings before interest, tax, depreciation and amortisation losses of less than $50 million for the year and to exit the year profitable on an adjusted ebitda basis," he said.

The company said it was confident revenues would approach $1 billion for the full year.

While revenues from the bio-pharmaceuticals business grew by 62 per cent to $173.8 million, Elan Drug Technologies (EDT) reported a 12 per cent fall in sales to $71.8 million.

Elan chief executive Kelly Martin confirmed a strategic evaluation of EDT was under way and that this would be completed in the next few months. However, he declined to elaborate on plans for the division.

There has been speculation that Elan would either sell or float its drug development business.

"We believe that EDT has very good growth potential," said Mr Martin. "We are exploring how to give it access to capital. There are a number of ways and we will be exploring these."

Goodbody Stockbrokers has valued the business in the region of $1.2 billion to $1.4 billion.

Research and development expenses rose 36 per cent to $81.2 million in the quarter, up from $59.7 million in the second quarter of 2007, primarily due to the advancement of its Alzheimer's disease programmes.

Next week, Elan plans to publish phase-three trial data for its Alzheimer's drug, Bapineuzumb or AAB-001, which it is developing with Wyeth. Both firms will present the full clinical phase-two data for AAB-001 at the International Conference on Alzheimer's Disease (ICAD) next Tuesday.

A decision on basing a new manufacturing plant in Dublin will be made in the next eight weeks, said Mr Martin.

"These are a steady set of results from Elan, with Tysabri continuing to gain traction in the MS market," said Goodbody analyst Ian Hunter. "The next catalyst for the stock will be the presentation of the full data from the AAB-001 phase two, at ICAD, next Tuesday. Speculation on this data, rather than financial performance, will drive the share price in the near term."

Davy analyst Jack Gorman said revenue growth was "modestly below forecast due to lower revenues from the EDT division", but said that, due primarily to lower operating costs, ebitda losses were better than forecast.