Considering Elan recently pushed back its break-even date to 2008, investors will have welcomed news that its Tysabri drug is likely to get the green light from the US Food and Drug Administration for use in the treatment of Crohn's disease.
The drug, which is being developed in conjunction with Biogen, was previously knocked back by European regulators.
Sadly, this is unlikely to give much of boost to the share price, according to Davy stockbrokers. Pharmaceuticals analyst Jack Gorman said the Crohn's treatment accounted for less than 5 per cent of Davy's sum-of-the-parts valuation of Elan. This means it is worth about $1 (€0.73) a share based on Davy's $21 price target for Elan, which has been left unchanged despite this week's news.
Elan is currently trading at just above $19 a share in New York.
Any major kicker to the share price will only come if its research on a new drug for Alzheimer's disease is successful. Elan has a handful of Alzheimer's programmes in the pipeline, but given its past difficulties in getting Tysabri to market, it could be some time off.
