By Jeanne Whalen
December 19, 2008 @ 3:06 pm
Elan is looking forward to the end of 2008. A slew of disappointments have grounded the biotech company’s once high-flying shares; they’ve fallen more than 70% this year.
Shareholders are grumbling, including one big one who is so fed up that he’s called for the ouster of CEO Kelly Martin.
As a snowstorm hit Health Blog HQ today, Martin braved the weather to come by, defend his record and talk about how he’s trying to turn things around.
First, Tysabri, the multiple sclerosis treatment Elan sells with Biogen Idec. The drug will have sales of nearly $1 billion this year. Sounds great, right? Blockbusters are hard to come by these days. But some shareholders think sales should be a lot brisker, given Tysabri’s efficacy advantage over other drugs.
The critics say Elan and Biogen Idec haven’t done enough to overcome doctor and patient concerns about PML, the very rare but potentially lethal brain infection associated with the drug. In fact, a patient just died from the condition.
Given the drug’s rocky road, Martin said he thinks $1 billion in sales isn’t bad. “We think the progress being made, despite all the challenges, is good progress,” he said.
But he said Elan and Biogen are trying to do more to dispel worries boost the drug. They’re stepping up talks with neurologists about how to spot signs of PML. They’re also studying patients who’ve contracted PML to figure out why they developed it –- and, perhaps, how to better identify those at risk. Because there have been so few cases of the brain infection, however, it could be hard to draw any firm conclusions about why Tysabri patients contract it, Elan president Carlos Paya acknowledged.
Shareholders in recent weeks have also blasted Martin and other managers of loss-making Elan for flying around in private jets; Martin said the company is trying to reduce its use of NetJets and use more video-conferencing. He also disagreed with critics who say that Elan talked up an experimental Alzheimer’s drug too much, causing the company’s stock to crash this summer when the drug delivered mixed results in a human study. “I think the expectations did rise. I don’t know why they rose to that degree,” he said.
Overall Martin said he is “frustrated” by Elan’s stock price. He said he’s had several conversations with Elan’s board lately about shareholder concerns. The way out, he said, is to continue building up Tysabri and to bring to market drugs in Elan’s pipeline, including Alzheimer’s treatments being developed with Wyeth.
Article printed from Health Blog: http://blogs.wsj.com/health
URL to article: http://blogs.wsj.com/health/2008/12/19/elan-ceo-defends-tysabri-sales-citing-good-progress/