FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of February, 2003
Commission File Number 001-13896
Elan Corporation, plc
(Translation of registrant's name into English)
Lincoln House, Lincoln Place, Dublin 2, Ireland
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F:
Form 20-F /X/ Form 40-F / /
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(1):
Yes / / No /X/
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of
a Form 6-K if submitted solely to provide an attached annual report to security
holders.
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(7):
Yes / / No /X/
-2-
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of
a Form 6-K if submitted to furnish a report or other document that the
registrant foreign private issuer must furnish and make public under the laws of
the jurisdiction in which the registrant is incorporated, domiciled or legally
organized (the registrant's "home country"), or under the rules of the home
country exchange on which the registrant's securities are traded, as long as the
report or other document is not a press release, is not required to be and has
not been distributed to the registrant's security holders, and, if discussing a
material event, has already been the subject of a Form 6-K submission or other
Commission filing on EDGAR.
Indicate by check mark whether by furnishing the information contained in
this Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes / / No /X/
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-
This Report of Foreign Issuer on Form 6-K is incorporated by reference into
the Registration Statements on Form F-3 of Elan Corporation, plc (Registration
Nos. 333-10718, 333-10726 and 333-100252), the Registration Statement on Form
F-4 of Elan Corporation, plc and the Post-Effective Amendments thereto on Forms
F-3 and S-8 (No. 333-12756), the Registration Statement of Elan and Athena
Neuroscience Finance, LLC (No. 333-13130), and the Registration Statements on
Form S-8 of Elan Corporation, plc (Registration Nos. 333-13996, 333-12344,
333-11940, 333-09644, 333-09284, 333-09048, 333-08384, 333-07361, 333-07136,
333-14240, 33-27506 and 333-100556).
EXHIBIT LIST
99.1 Press Release
99.2 Correction of typographical errors in press release.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ELAN CORPORATION, plc
By: /s/ William F. Daniel
---------------------------------------
William F. Daniel
Company Secretary
Date: February 6, 2003
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACTS:
INVESTORS: (U.S.) INVESTORS: (EUROPE) MEDIA:
Jack Howarth Emer Reynolds Sunny Uberoi
Ph: 212-407-5740 Ph: 353-1-709-4000 Ph: 212-994-8206
800-252-3526 00800 28352600 800-252-3526
ELAN REPORTS FOURTH QUARTER 2002 AND FULL-YEAR FINANCIAL RESULTS
AND RECOVERY PLAN UPDATE
FOURTH QUARTER 2002 FINANCIAL HIGHLIGHTS
o Net loss of $639.0 million ($1.83 per diluted share) compared to net income
$3.5 million ($0.01 per diluted share) in the fourth quarter of 2001.
o Other, mainly non-cash, charges of $451.0 million (net of gains of $230.8
million) compared to other charges of $202.8 million in the fourth quarter
2001.
o Total revenue of $223.6 million compared to $487.6 million in the fourth
quarter of 2001, a decrease of 54%. Total revenue of $223.6 million is
after a charge of $68.0 million in respect of the impact of generic
competition principally affecting Zanaflex(TM).
o Net loss of $120.0 million for the fourth quarter of 2002 ($0.34 per
diluted share) before other charges of $451.0 million and a charge against
revenue of $68.0 million for the impact of generic competition.
o Revenue from retained products (excluding Zanaflex) of $125.2 million
compared to $125.5 million in the fourth quarter of 2001.
o Cash balances at December 31, 2002 were $1,005.0 million.
FULL-YEAR 2002 FINANCIAL HIGHLIGHTS
o Net loss of $2,394.8 million ($6.85 per diluted share) compared to net
income of $342.8 million ($0.95 per diluted share) for full-year 2001.
o Other, mainly non-cash, charges of $2,224.8 million (net of gains of $230.8
million) compared to $355.1 million for full-year 2001.
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND
RECOVERY PLAN UPDATE
Page 2
o Total revenue of $1,470.1 million compared to $1,862.5 million for
full-year 2001, a decrease of 21%.
o Revenue from retained products (excluding Zanaflex) of $470.2 million
compared to $443.6 million for full-year 2002, an increase of 6%.
RECOVERY PLAN IMPLEMENTATION HIGHLIGHTS
o Gross proceeds from asset and product divestitures expected to exceed $1.5
billion after giving effect to the proposed sale of primary care franchise.
The principal elements are as follows:
$ million
Primary care franchise (pending) 850.0
Abelcet(TM) 360.0
Avinza(TM)/Ligand Pharmaceuticals Inc. 120.0
Athena Diagnostics 82.0
Actiq(TM) 50.0
Adalat(TM)CC 45.0
o Contractual and potential future payments reduced by $1.9 billion from $4.5
billion at December 31, 2001 to $2.6 billion at December 31, 2002, on a
pro-forma basis after giving effect to the proposed sale of the primary
care franchise. The main elements being:
$ million
Repaid revolving credit facility $325.0
Repaid 3.5% convertible notes $62.6
Purchased royalty rights and restructured risk
sharing arrangements $440.0
Repurchase of 3.25% Liquid Yield Option Notes
("LYONs") at discount $196.5
Reduced fixed contingent and potential product
payment obligations $678.8
Reduced EPIL guarantee $160.0
o Appointed Mr. G. Kelly Martin as Elan's chief executive officer, and
appointed Mr. Martin and Mr. William F. Daniel, Elan's company secretary,
to Elan's Board of Directors.
o Pro-forma cash balance after taking account of the proposed sale of primary
care franchise and the purchase of related royalty rights of $1.4 billion
compared to $1.6 billion at December 31, 2001.
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND
RECOVERY PLAN UPDATE
Page 3
o Headcount, after taking account of the proposed sale of primary care
franchise, reduced to less than 2,900 employees from approximately 4,700
employees in July 2002, a decrease of approximately 1,800 (800 of which are
related to asset divestitures) and ahead of target.
o Significant progress in simplifying balance sheet and streamlining
business.
R&D UPDATE
o Antegren(TM) (natalizumab) Phase III trials for Crohn's disease and
multiple sclerosis ("MS") fully enrolled.
o Two separate publications in the New England Journal of Medicine, dated
January 2, 2003, reviewed Phase II data on Antegren for both indications.
o Expect to file two Investigational New Drug Applications ("1NDs") from the
Alzheimer's immunotherapy program during 2003.
o Expect to file three U.S. New Drug Applications ("NDAs") and four European
Marketing Authorization Applications ("MAAs") by the end of 2004.
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND
RECOVERY PLAN UPDATE
Page 4
DUBLIN, IRELAND, FEBRUARY 5, 2003 -- Elan Corporation, plc (NYSE: ELN)("Elan")
today announced its fourth quarter and full-year 2002 results and an update to
its recovery plan. Commenting on the results and recovery plan, Dr. Garo Armen,
Elan's chairman said, "Giving effect to the proposed sale of our primary care
franchise, we have achieved our target of raising asset divestiture proceeds of
$1.5 billion from our asset divestiture program -- a year ahead of plan. This
renewed balance sheet strength enables us to meet our financial obligations and
invest in our pipeline, which is critical to building value for Elan
shareholders and bringing to market important products for treating debilitating
diseases." Dr. Armen added, "All other key aspects of our recovery plan, which
include a significant reduction in costs and implementation of operational
efficiencies, are on or ahead of target."
Kelly Martin, Elan's chief executive officer, said, "Having accomplished a
critical step in our recovery plan, our priorities will now be to build a
world-class company capable of executing on our mandate of developing highly
effective treatments for Crohn's, multiple sclerosis and Alzheimer's patients."
Mr. Martin continued, "We are also focused on optimizing the opportunities of
our present commercial business, which we believe has potential for substantial
growth. We are confident that we will be able to deliver significant value for
our stakeholders through the expeditious execution of all aspects of our plan."
The following analysis is based on the pro-forma income statement data, which
excludes other charges, set out on page 19. Elan has prepared US GAAP income
statement data which is set out on page 20 and which is reconciled to the
pro-forma income statement data on page 21.
REVENUE
Total revenue decreased 54% to $223.6 million in the fourth quarter of 2002 from
$487.6 million in the fourth quarter of 2001 and decreased 21% from $1,862.5
million for the full-year 2001 to $1,470.1 million for the full-year 2002.
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND
RECOVERY PLAN UPDATE
Page 5
Following the announcement of the divestment of Elan's primary care franchise on
January 30, 2003, and the completion of the sale of a number of other products
and businesses, the company's product revenues are analysed between those from
currently retained products and those arising from products divested through the
implementation of the recovery plan and the 2001 product rationalisation
program.
Total revenue can be further analysed as follows:
3 MONTHS ENDED 3 MONTHS ENDED 12 MONTHS ENDED 12 MONTHS ENDED
DECEMBER 31, 2001 DECEMBER 31, 2002 DECEMBER 31, 2001 DECEMBER 31, 2002
(a) PRODUCT REVENUE US$M US$M US$M US$M
Revenues from retained
products 163.6 126.3 605.3 593.7
Revenues from divested
products (net) 119.8 124.6 669.2 527.7
Revenues from Pharma
Marketing/Autoimmune 67.3 - 157.7 62.8
Product returns -
genericisation - (68.0) - (68.0)
--------------------------------------------------------------------------------
Total product revenue 350.7 182.9 1,432.2 1,116.2
--------------------------------------------------------------------------------
(b) CONTRACT REVENUE
Amortisation of fees 85.9 20.2 283.2 234.7
Research revenue and
milestones 27.1 20.5 88.4 82.0
Pharma Marketing/Autoimmune
23.9 - 58.7 37.2
--------------------------------------------------------------------------------
Total contract revenue 136.9 40.7 430.3 353.9
--------------------------------------------------------------------------------
TOTAL REVENUE 487.6 223.6 1,862.5 1,470.1
--------------------------------------------------------------------------------
(a) PRODUCT REVENUE
Total product revenue from all sources for the fourth quarter of 2002 was $182.9
million compared to $350.7 in the fourth quarter of 2001, a decline of 48%.
Total product revenue for the full-year 2002 was $1,116.2 million compared to
$1,432.2 million for the full-year 2001, a decrease of 22%. The decline in
product revenue is due to a number of factors more fully explained below.
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND
RECOVERY PLAN UPDATE
Page 6
REVENUE FROM RETAINED PRODUCTS
Revenues from retained products includes those revenues related to products that
Elan has not divested or agreed to divest at February 5, 2003, as set out on
page 24. Revenue from retained products (excluding Zanaflex) were $125.2 million
in the fourth quarter of 2002 compared to $125.5 million in the fourth quarter
of 2001. While prescriptions and demand sales for Elan's retained products
continued to grow strongly, product revenues were flat principally due to the
factors discussed below.
Aggregate sales of Maxipime(TM) and Azactam(TM) in the fourth quarter of 2002
were $34.7 million and were $112.2 million for the full-year 2002 and are below
those of the comparable periods in 2001. As reported in the third quarter of
2002, sales of Maxipime and Azactam were impacted among other things by
short-term supply issues. These supply issues were resolved in the fourth
quarter of 2002 and sales of these products recovered from $16.3 million in the
third quarter of 2002 to $34.7 million in the fourth quarter of 2002. Demand for
Maxipime is strong and continues to grow, with audited sales volumes for the two
months ending November 2002 21% higher than the same period in 2001, and 38%
higher for the full-year 2002 compared with the same period in 2001. Audited
sales volumes for Azactam in the two months ended November 2002 were 3% lower
than the same period in 2001 and 2% higher for the full-year 2002 compared with
the same period in 2001.
Prescriptions for Zonegran(TM) remained strong for the fourth quarter of 2002
increasing by 58%; however, revenues were $6.0 million, 35% lower than the
fourth quarter of 2001 due to the change in Elan's discounting strategy in the
third and fourth quarter of 2002 and the resulting continued reduction in
wholesaler inventories. Revenues for full-year 2002 from Zonegran were 14%
higher than in the same period in 2001. Frova(TM), which was launched in the
second quarter of 2002 by the combined Elan and UCB Pharma, Inc. sales forces,
generated revenues of $4.0 million in the fourth quarter of 2002 following
revenues of $6.2 million in the second quarter of 2002, which reflected stocking
of the wholesale channel ahead of launch, and $0.9 million in the third quarter
of 2002. Prescription demand continues to increase strongly with a 92% increase
in the fourth quarter of 2002 over the third quarter of 2002. Elan and UCB
Pharma, Inc. continue to grow Frova in terms of prescription volume, market
share and revenue. Myobloc(TM)/Neurobloc(TM)
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND
RECOVERY PLAN UPDATE
Page 7
global product sales were $8.6 million in the fourth quarter of 2002 compared to
$2.9 million in the fourth quarter of 2001. Revenues for the full-year 2002 were
$19.6 million compared to $11.5 million for the same period in 2001. The
increase in revenue is the result of the successful implementation in the fourth
quarter 2002 of a new product strategy resulting in significant increase in
physician demand for the product.
Supply conditions related to the pain portfolio improved during the fourth
quarter and product sales increased by 18% from $15.4 million in the fourth
quarter of 2001 to $18.1 million in the fourth quarter of 2002. European product
revenues increased 8% over the fourth quarter of 2001 and by 18% for full-year
2002 over full-year 2001. The increase was across the entire product range.
REVENUES FROM DIVESTED PRODUCTS (NET)
During the fourth quarter of 2002, Elan agreed to divest its dermatology and
diagnostic businesses and the North American and any Japanese rights to Abelcet,
which accounted in aggregate for revenues of $35.5 million in the fourth quarter
of 2002 and $182.7 million in the full-year 2002. Elan does not expect to record
any significant revenues from these businesses and products in 2003.
On January 30, 2003, Elan announced its proposed divestment of the primary care
franchise, which includes the rights to Skelaxin(TM) and Sonata(TM) and, which
is subject to Elan's shareholder approval, regulatory approvals, third party
consents and other customary conditions. During the fourth quarter of 2002,
product revenues from Skelaxin and Sonata were $40.4 million and for the
full-year 2002 were $237.9 million. It is expected that this transaction will
close before the end of April 2003 and Elan will continue to book sales of
Skelaxin and Sonata up to the close of this sale.
Revenues from divested products include $35.4 million in the fourth quarter of
2002 related to the divestment of certain European rights to Actiq ($29.8
million) and $5.6 million in respect of amortised revenues related to the
partnering of rights to generic Adalat CC and the restructuring of Elan's Avinza
license agreement with Ligand Pharmaceuticals, Inc. The remaining
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND
RECOVERY PLAN UPDATE
Page 8
unamortised revenues on these products of $149.9 million will be recognised as
revenue over the next five years.
PHARMA MARKETING LIMITED/AUTOIMMUNE
During the third quarter of 2002, Elan acquired all the royalty rights held by
Autoimmune Research and Development Corp Ltd. ("Autoimmune") and the arrangement
was terminated. Consequently, no co-promotion revenues were received from
Autoimmune during the fourth quarter of 2002 compared to $15.9 million in the
fourth quarter of 2001. There were no revenues from Pharma Marketing Ltd.
("Pharma Marketing") in the fourth quarter of 2002 compared to $51.4 million in
the fourth quarter of 2001 and no further revenues will be received from Pharma
Marketing.
PRODUCT RETURNS - GENERICISATION
During the year 2002, a number of products that Elan markets or had marketed
suffered generic competition with a consequent significant reduction in sales.
Due to the unusually severe impact of generic competition on sales of Zanaflex,
Elan carried out a comprehensive review of sales trends and the level and dating
of inventory held by Elan's distributors. Following this review, and in addition
to normal recurring product return provisions, Elan took a charge of $68.0
million against product revenue in the fourth quarter of 2002 for expected
returns that relate primarily to Zanaflex.
(b) CONTRACT REVENUES
Contract revenue in the fourth quarter of 2002 was $40.7 million compared to
$136.9 million in the same period of 2001. Contract revenue in the full-year
2002 was $353.9 million compared to $430.3 million in full-year 2001. The
amortisation of fees amounted to $20.2 million in the fourth quarter of 2002
compared to $85.9 million in the same period of 2001. Of the $20.2 million in
amortised fees in the fourth quarter of 2002, $15.3 million related to business
ventures. As part of the recovery plan outlined on July 31, 2002, Elan has
undertaken a review of its business venture program and has commenced the
termination of non-core business ventures. The reduction in amortised fees
during the fourth quarter of 2002 arose primarily from the termination of
business ventures.
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND
RECOVERY PLAN UPDATE
Page 9
Research revenue and milestones amounted to $20.5 million in the fourth quarter
of 2002 compared to $27.1 million in the same period of 2001. No revenues were
received under the arrangements with Pharma Marketing and Autoimmune during the
fourth quarter of 2002. Research revenues of $13.2 million were received from
Pharma Marketing and $10.7 million from Autoimmune in the fourth quarter of
2001. No further research revenues will be received from Pharma Marketing or
Autoimmune.
GROSS PROFIT
The gross profit margin on product revenues (excluding the rationalisation
program and exceptional product returns) was 58% in the fourth quarter of 2002
compared to 70% in the fourth quarter of 2001 and 56% in the third quarter of
2002 reflecting changes in the mix of product revenue, in particular the
decrease in revenue from Pharma Marketing and Autoimmune.
OPERATING EXPENSES
Selling, general and administrative expenses increased by 15% from $151.8
million in the fourth quarter of 2001 to $174.4 million in the fourth quarter of
2002. Research and development expenses increased by 23% from $87.0 million in
the fourth quarter of 2001 to $107.4 million in the fourth quarter of 2002
principally reflecting increased clinical trial expenditure, particularly on
Antegren. Operating expenses are expected to decline significantly in 2003
following the implementation of the recovery plan and associated headcount
reductions and the proposed sale of the primary care franchise.
Elan adopted SFAS No. 142 "Goodwill and Other Intangible Assets" effective
January 1, 2002, and on that date Elan ceased amortisation of all goodwill.
Goodwill amortisation in the fourth quarter of 2001 and full-year 2001 was $7.5
million and $29.2 million, respectively.
NET INTEREST AND OTHER INCOME/(LOSS)
Net interest and other income/(loss) amounted to a loss of $15.9 million in the
fourth quarter of 2002 compared to income of $60.8 million in the same period of
2001. Net interest expense
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND
RECOVERY PLAN UPDATE
Page 10
amounted to $17.9 million compared to $6.8 million in the fourth quarter of 2001
reflecting lower investment income. Other main movements from the fourth quarter
of 2001 are a reduction in investment gains from $85.4 million to $2.4 million
in the current quarter. The reduction in investment gains reflects the inclusion
of a $31.5 million gain on the sale of approximately 20% stockholding in Athena
Diagnostics, Inc. ("Athena Diagnostics') in the fourth quarter of 2001 and gains
made on the disposal of a number of other investments. Business venture funding
amounted to $2.9 million for the fourth quarter ended December 31, 2002,
compared to $6.2 million in the fourth quarter of 2001.
OTHER CHARGES
The results for the fourth quarter of 2002 have been arrived at after giving
effect to $451.0 million in other, mainly non-cash, charges (net of $230.8
million in gains).
3 MONTHS ENDED 12 MONTHS ENDED
DECEMBER 31, 2002 DECEMBER 31, 2002
US$M US$M
(a) Investments 317.9 1,537.4
(b) Recovery Plan related and other charges
(net of $230.8 million in gains) 133.1 687.4
----------------------- --------------------------
TOTAL OTHER CHARGES 451.0 2,224.8
----------------------- --------------------------
(a) INVESTMENTS
Investment related charges can be analysed as follows:
3 MONTHS ENDED 12 MONTHS ENDED
DECEMBER 31, 2002 DECEMBER 31, 2002
US$M US$M
Impairment of investments held by Elan 260.2 852.8
Guarantees related to EPIL II/EPIL III 57.7 684.6
---------------------- --------------------------
TOTAL INVESTMENT RELATED CHARGES 317.9 1,537.4
---------------------- --------------------------
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND
RECOVERY PLAN UPDATE
Page 11
The financial markets for biotechnology, drug delivery and pharmaceutical
companies declined significantly during 2002. For example, during 2002 the Amex
biotechnology industry index fell by 42% and the equivalent Nasdaq index fell by
45%. The market for biotechnology stocks also saw a reduction in the number and
amount of financings that were completed. The carrying value of Elan's on
balance sheet investment portfolio fell by approximately 60% during 2002. This
reflects the decline in the market overall and also the composition of Elan's
portfolio and the impact on the value of its investments of the conditions in
the financing market for the smaller biotechnology companies that make up a
significant part of Elan's portfolio.
During the fourth quarter of 2002, Elan recorded an impairment charge of $260.2
million. This brings the charge for the full-year 2002 to $852.8 million.
Included in the fourth quarter impairment charge of 2002 is a charge for $52.4
million related to a decline in the values of quoted equities held by Elan. The
balance of $207.8 million relates mainly to the difficult financing market and
the impact of the business venture restructuring program initiated in the third
quarter of 2002. After providing for this impairment charge of $260.2 million,
Elan's on balance sheet investment portfolio amounts to $644.0 million
(including $84.7 million in managed funds) at December 31, 2002.
In addition, Elan has guaranteed loan notes issued by two Qualifying Special
Purpose Entities ("QSPEs"), EPIL II and EPIL III, which are not consolidated, to
the extent that the investments held by them are insufficient to repay the loan
notes and accrued interest when they fall due. The aggregate principal amount
outstanding under the loan notes issued by EPIL II and EPIL III was $840.0
million at December 31, 2002 and is repayable in June 2004 and March 2005,
respectively.
In the fourth quarter of 2002, Elan made further provisions of $57.7 million to
cover the estimated shortfall in the values of the investment portfolios of EPIL
II and EPIL III. Elan had previously made provisions of $231.4 million and
$253.9 million to cover estimated shortfalls in the value of the investment
portfolios of EPIL II and EPIL III, respectively, in 2002. The total charge for
the full-year 2002 was $543.0 million. These charges have been arrived at based
on the estimated value of the investment portfolios at December 31, 2002, on the
basis that the
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND
RECOVERY PLAN UPDATE
Page 12
investments will be held for the medium term and, accordingly, do not reflect
any liquidity discount. The estimated value has been arrived at using
established financial methodologies. After providing for the estimated
investment shortfalls, the estimated investment values and cash positions of
EPIL II and EPIL III at December 31, 2002, was as follows:
EPIL II EPIL III TOTAL
US$M US$M US$M
Investments in public companies 65.4 112.5 177.9
Investments in private companies 39.6 7.5 47.1
Cash 49.9 22.6 72.5
Accrued interest and expenses (0.3) (0.2) (0.5)
---------------------- --------------- -----------
Total assets 154.6 142.4 297.0
Provisions for guarantees 295.4 247.6 543.0
---------------------- --------------- -----------
Total indebtedness 450.0 390.0 840.0
---------------------------------------------------------------- ---------------------- --------------- -----------
Included, as an appendix on page 25, is an analysis of the impact on the year
ended December 31, 2002 results, assets and liabilities of consolidating the
QSPEs. If the QSPEs were consolidated, "net interest and other loss" would be
increased by $72.4 million in the year ended December 31, 2002, and by $30.9
million in the fourth quarter of 2002. Other charges would be reduced by $272.0
million in the full-year 2002 and $25.0 million in the fourth quarter of 2002.
(b) RECOVERY PLAN RELATED AND OTHER CHARGES (NET)
Recovery plan related and other charges (net) can be analysed as follows:
3 MONTHS ENDED 12 MONTHS ENDED
DECEMBER 31, 2002 DECEMBER 31, 2002
US$M US$M
Write-down of tangible and intangible assets 300.3 713.2
Impairment of goodwill 22.8 77.5
Severance costs, relocation and exit costs 22.4 82.2
Costs related to litigation, SEC related legal costs
and 401k rescission costs 18.4 45.3
Gain on sale of Athena Diagnostics/Abelcet (177.9) (177.9)
Gain on repurchase of LYONS (37.7) (37.7)
---------------------------------------------------------------
Other (15.2) (15.2)
------------------------ --------------------------
Recovery plan related and other charges (net) 133.1 687.4
--------------------------------------------------------------- ------------------------ --------------------------
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND
RECOVERY PLAN UPDATE
Page 13
As part of Elan's recovery plan, the company has identified a range of
businesses and products that it intends to sell in the near term. In many cases,
Elan has received indicative offers for these assets and has written the assets
down to their fair value. In other cases, the impairment arises because of
changes to the forecast profitability of these assets arising out of current
information about estimates of future prospects. Of the $300.3 million
write-down of tangible and intangible assets for the fourth quarter 2002, $170.6
million relates to assets that Elan intends to sell. The balance of the charges,
amounting to $129.7 million relate to tangible and intangible assets that the
company intends to retain and use.
In accordance with SFAS No. 142, Elan performed its annual impairment review of
goodwill on September 30, 2002. As a result of this review Elan recorded an
impairment charge of $54.7 million in the third quarter of 2002. All of this
charge arose on reporting units that are expected to be sold. As the recovery
plan continued to be implemented a further review was conducted at December 31,
2002 and an impairment charge of $22.8 million was recorded. This charge relates
primarily to smaller businesses and reflects the fact that, in some cases,
offers received to date are lower than originally expected.
During the fourth quarter of 2002, Elan repurchased $318.6 in principal amount
at maturity of LYONs. These LYONs, having an accreted value of $190.1 million at
the date of purchase, were purchased at an aggregate cost of $149.8 million,
resulting in a net gain of $37.7 million after related costs.
As the recovery plan continues to be implemented, Elan expects to record a
number of gains. Elan may also incur losses on certain assets and business
divestments even though assets have been written down to their estimated fair
value if the ultimate selling price is lower than that currently forecast. For
example, the company expects to record a profit of approximately $370.0 million
arising from the proposed divestment of the primary care franchise announced on
January 30, 2003. On the closing date of this proposed sale, Elan expects to
record a charge of up to
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND
RECOVERY PLAN UPDATE
Page 14
$225.0 million when the royalty rights related to Sonata and Prialt are acquired
from Pharma Operating Ltd ("Pharma Operating"), a wholly owned subsidiary of
Pharma Marketing.
Elan may in the future incur other charges relating to severance, retention and
similar restructuring costs. The cash element of any such charges is not
expected to exceed $100 million in the year ended December 31, 2003. Elan may
also incur additional impairment charges related to investments and intangible
assets if their fair value falls below their carrying value as a result of
adverse changes in circumstances or market conditions.
LIQUIDITY
At December 31, 2002, Elan had $1,005.0 million in cash and cash equivalents,
compared with $632.9 million at September 30, 2002, and $1,572.5 million at
December 31, 2001.
In the fourth quarter of 2002, Elan made fixed and contingent product payments
totalling $49.3 million. Capital expenditure resulted in a net cash outlay of
$13.9 million.
Based on its recovery plan, Elan believes it has sufficient cash, liquid
resources, investments and other assets that are capable of being monetised to
meet its liquidity requirements. The focus of the recovery plan is on
maintaining financial flexibility through cash generation. Elan's cash position
will in future periods be dependent on a number of factors, including its asset
divestiture program, its balance sheet restructuring, its debt service
requirements and its future operating cash flow. In addition to the actions and
objectives outlined with respect to Elan's recovery plan, Elan may in the future
seek to raise additional capital, restructure or refinance its outstanding
indebtedness, repurchase its equity securities or its outstanding debt,
including the LYONs, in the open market or pursuant to privately negotiated
transactions, or take a combination of such steps or other steps to increase or
manage its liquidity and capital resources. Any such refinancings or repurchases
may be material.
Elan expects committed cash outlays such as capital expenditures, restructuring
costs, product payments (after taking into consideration the divestment of the
primary care franchise) and other
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND
RECOVERY PLAN UPDATE
Page 15
commitments, excluding operating cashflows, to be approximately $330.0 million
through December 31, 2003.
The following table sets out at December 31, 2002, the major contracted and
potential cash payments relating to Elan's business, excluding capital
expenditures or future investments in financial assets such as in business
venture partners, which together could amount to approximately $70.0 million
through December 31, 2003. On a pro-forma basis, after giving effect to the
proposed sale of the primary care franchise, the total contracted potential and
LYONs obligations at December 31, 2002, as set out in the table below, will be
reduced to $2.6 billion from $4.5 billion at December 31, 2001, and $3.1 billion
at December 31, 2002.
-------------------------------------------------------------------------------------------------------------------
AT DECEMBER 31, 2002
-------------------------------------------------------------------------------------------------------------------
2003 2004 THEREAFTER TOTAL PRO-FORMA DEC 31
US$M US$M US$M US$M (3)US$M 2001
-------------------------------------------------------------------------------------------------------------------
Contracted
7.25% Senior Notes (2008) - - 650.0 650.0 650.0 650.0
Fixed Product Payments 174.7 29.1 23.4 227.2 163.5 267.2
Contingent Product Payments (1) 102.9 75.4 29.4 207.7 58.0 406.3
EPIL II & III (1) - 450.0 390.0 840.0 840.0 1,000.0
3.25% LYONs (2) 816.9 - - 816.9 816.9 1,013.4
Other debt - - - - - 387.3
-----------------------------------------------------------------------------
TOTAL CONTRACTED & LYONS 1,094.5 554.5 1,092.8 2,741.8 2,528.4 3,724.2
Potential
Pharma Marketing/Autoimmune 225.0 - 110.0 335.0 110.0 550.0
(1)
Product Acquisitions (1) - - 47.3 47.3 - 226.9
-----------------------------------------------------------------------------
TOTAL POTENTIAL 225.0 - 157.3 382.3 110.0 776.9
-----------------------------------------------------------------------------
TOTAL CONTRACTED, POTENTIAL & LYONS
1,319.5 554.5 1,250.1 3,124.1 2,638.4 4,501.1
-----------------------------------------------------------------------------
CASH BALANCES 1,005.0 1,380.0 1,572.5
-------------------------------------------------------------------------------------------------------------------
(1) In order to comply with US GAAP, these amounts are not included on the
balance sheet.
(2) If the LYONs are put to the company, Elan has the option to repay the LYONs
for cash or shares or any combination thereof.
(3) After taking account of sale of primary care franchise.
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND
RECOVERY PLAN UPDATE
Page 16
Included in fixed contingent and potential product payments at December 31, 2002
is $260.8 million in respect of Sonata, which represents the present value of
the estimated gross payments due in connection with Sonata of approximately
$290.0 million. Approximately $240.0 million of these obligations will be
assumed by King Pharmaceuticals, Inc. upon closing of the sale of the primary
care franchise and the balance of approximately $50.0 million (which is included
in fixed product payments above) will be paid by Elan up to the closing.
On January 30, 2003, Elan announced its agreement with Pharma Marketing that,
contingent on closing of the sale of Sonata, Elan will, on the closing date, pay
Pharma Operating $225.0 million (less royalty payments on all related products
paid or due to Pharma Operating from January 1, 2003 to the closing of the sale)
to acquire the Pharma Operating royalty rights with respect to Sonata and
Prialt.
In addition, Elan will have the option to purchase Pharma Operating's royalty
rights on the Zonegran, Frova and Zanaflex products until January 3, 2005, an
extension from the earlier date of June 30, 2003. The current purchase option
price has been reduced to $110.0 million plus 15% per annum from the earlier
date of the Sonata sale closing or July 1, 2003, less royalty payments (which
are secured) made for periods after the Sonata sale closing. Under the previous
arrangements the option price at March 31, 2003, would have been approximately
$423.0 million for all the royalty rights held by Pharma Marketing.
R&D UPDATE
The most advanced products in Elan's pipeline are Antegren and Prialt. In
addition, Elan has one of the world's largest research efforts in Alzheimer's
disease ("AD").
ANTEGREN
Elan and Biogen are collaborating on the development, manufacturing and
commercialisation of Antegren, a humanized monoclonal antibody, the first in a
new class of compounds known as selective adhesion molecule inhibitors (SAM
inhibitors).
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND
RECOVERY PLAN UPDATE
Page 17
Antegren has recently been the focus of two separate publications in the New
England Journal of Medicine ("NEJM") (January 2, 2003). The publications
describe Antegren Phase II clinical study data in Crohn's disease and in MS. The
first NEJM publication of an investigational study in Crohn's disease showed
promising results on disease remission and improved quality of life for patients
with Crohn's disease. The clinical remission data indicate a maximal response
rate of up to 71% where 44% of Antegren treated patients achieved clinical
remission. The MS study results published in the second NEJM article indicate
that Antegren treatment reduced new inflammatory brain lesions by up to 93% and
produced a reduction of approximately 50% in the number of patients experiencing
relapses for patients with relapsing forms of MS.
Based on the promising findings in Phase II, Elan and Biogen are presently
conducting four Phase III trials to evaluate the safety and efficacy of Antegren
(natalizumab) in both Crohn's disease and MS. The two trials in Crohn's disease
are progressing with a filing of the New Drug Application ("NDA") for Crohn's
disease expected in the fourth quarter of this year. ENACT- 1 (Evaluation of
Natalizumab in Active Crohn's Disease Trial - 1), the largest ever study in
Crohn's disease conducted to date, is now fully enrolled with more than 850
patients and will evaluate clinical response and ability to induce remission;
ENACT-2 (Evaluation of Natalizumab As Continuous Therapy - 2) will evaluate
duration of effect. ENACT-2 is also fully enrolled. The two MS trials are both
fully enrolled and will evaluate natalizumab in patients with
relapsing-remitting forms of the disease. AFFIRM (natalizumab safety and
efficacy in relapsing remitting MS) will evaluate the ability of natalizumab to
slow the rate of disability in MS and reduce the rate of clinical relapses;
SENTINEL (safety and efficacy of natalizumab in combination with AVONEX(R)
(Interferon beta-1-a) in patients with relapsing-remitting MS) will determine if
the combination of natalizumab and AVONEX is more effective than treatment with
AVONEX alone in slowing rate of disability and reducing rate of clinical
relapses.
Elan continues to believe that Antegren will provide a meaningful advance for
patients with these debilitating diseases.
PRIALT
The final Phase III trial for Prialt is currently recruiting patients in line
with planned enrollment
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND
RECOVERY PLAN UPDATE
Page 18
and we expect to file the NDA during this year. The U.S. Food and Drug
Administration has granted approval for a treatment IND program, which will
follow the completion of enrollment for the current Phase III trial.
ALZHEIMER'S IMMUNOTHERAPY PROGRAM
Elan and Wyeth are making significant progress in the Alzheimer's immunotherapy
program and have a goal of generating two INDs from this program during 2003.
These INDs include the previously announced monoclonal antibody program, as well
as a novel immunotherapeutic Abeta peptide conjugate. Elan and Wyeth are
leveraging the innovative conjugate technology that Wyeth uses in some of their
other products. This conjugate is engineered to provide a strongly immunogenic
non-self T-cell epitope in concert with the critical N-terminus of the Abeta
peptide.
Elan is focused on the discovery, development, manufacturing, selling and
marketing of novel therapeutic products in neurology, pain management and
autoimmune diseases. Elan shares trade on the New York, London and Dublin Stock
Exchanges.
This document contains forward-looking statements about Elan's financial
condition, results of operations and business prospects that involve substantial
risks and uncertainties. You can identify these statements by the fact that they
use words such as "anticipate", "estimate", "project", "envisage", "intend",
"plan", "believe" and other words and terms of similar meaning in connection
with any discussion of future operating or financial performance or events.
Among the factors that could cause actual results to differ materially from
those described herein are the following: the outcome of Elan's recovery plan
and its ability to maintain flexibility and maintain sufficient cash, liquid
resources, and investments and other assets capable of being monetized to meet
its liquidity requirements; the risk that Elan's shareholders will fail to
approve the sale of the primary care franchise, that regulatory approvals and
third party consents necessary to consummate the sale will not be received on a
timely basis, or at all, or that the further conditions necessary to consummate
the sale will not be satisfied on a timely basis, or at all; the outcome of the
ongoing SEC investigation and shareholder litigation; the success of research
and development activities and the speed with which regulatory authorizations
and product launches may be achieved; competitive developments affecting Elan's
current products; the ability to successfully market both new and existing
products; difficulties or delays in manufacturing; the ability to meet generic
and branded competition after the expiration of Elan's patents; trend towards
managed care and health care cost containment; possible legislation affecting
pharmaceutical pricing; exposure to product liability and other types of
lawsuits; Elan's ability to protect its intellectual property; interest rate and
foreign currency exchange rate fluctuations; governmental laws and regulations
affecting domestic and foreign operations, including tax obligations; general
changes in US and Irish generally accepted accounting principles; growth in
costs and expenses; changes in product mix; and the impact of acquisitions,
divestitures, restructurings, product withdrawals and other unusual items. A
further list and description of these risks, uncertainties and other matters can
be found in Elan's Annual Report on Form 20-F for the fiscal year ended December
31, 2001, and in its Reports of Foreign Issuer on Form 6-K. Elan assumes no
obligation to update any forward-looking statements, whether as a result of new
information, future events or otherwise.
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND
RECOVERY PLAN UPDATE
Page 19
THREE MONTHS ENDED UNAUDITED INCOME STATEMENT TWELVE MONTHS
DECEMBER 31, DATA-- PRO FORMA ENDED DECEMBER 31,
2001 2002 2001 2002
US$m US$M US$m US$M
--------------- ------------ ---------------------------------------------------------- ------------ --------------
REVENUES
350.7 182.9 Product revenues 1,432.2 1,116.2
136.9 40.7 Contract revenues 430.3 353.9
--------------- ------------ ------------ --------------
487.6 223.6 Total revenues 1,862.5 1,470.1
--------------- ------------ ------------ --------------
COSTS AND EXPENSES
87.0 107.4 Research & development 321.2 397.1
99.1 98.9 Cost of goods sold 379.5 417.0
151.8 174.4 Selling, general & administrative 603.4 714.0
--------------- ------------ ------------ --------------
337.9 380.7 Total operating expenses 1,304.1 1,528.1
--------------- ------------ ------------ --------------
149.7 (157.1) Operating income/(loss) 558.4 (58.0)
--------------- ------------ ------------ --------------
(6.8) (17.9) Net interest income/(expense) 12.6 (43.4)
(6.2) (2.9) Business venture funding (23.3) (23.9)
85.4 2.4 Investment gains 175.0 19.7
(11.6) 2.5 Investment losses and other (7.4) (44.6)
--------------- ------------ ------------ --------------
60.8 (15.9) Net interest and other income/(loss) 156.9 (92.2)
--------------- ------------ ------------ --------------
210.5 (173.0) Net income/(loss) before tax and other charges 715.3 (150.2)
(4.2) (15.0) Taxation (17.4) (19.8)
--------------- ------------ ------------ --------------
206.3 (188.0) Net income/(loss) before other charges 697.9 (170.0)
(202.8) (451.0) Other charges (355.1) (2,224.8)
--------------- ------------ ------------ --------------
3.5 (639.0) Net income/(loss) 342.8 (2,394.8)
=============== ============ ============ ==============
$0.56 ($0.54) Diluted earnings/(loss) per ordinary share before other $1.91 ($0.49)
charge
$0.01 ($1.83) Diluted earnings/(loss) per ordinary share after other $0.95 ($6.85)
charges
OTHER INFORMATION
388.5 124.7 Gross Margin 1,483.0 1,053.1
35.7 50.1 Depreciation and amortisation included in operating costs 177.8 204.8
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND
RECOVERY PLAN UPDATE
Page 20
THREE MONTHS UNAUDITED CONSOLIDATED US GAAP TWELVE MONTHS
ENDED DECEMBER 31, INCOME STATEMENT DATA ENDED DECEMBER 31,
2001 2002 2001 2002
US$m US$M US$m US$M
--------------- ------------ ---------------------------------------------------------- ------------ --------------
350.7 182.9 REVENUES 1,426.7 1,116.2
Product revenues
136.9 40.7 Contract revenues 432.3 353.9
--------------- ------------ ------------ --------------
487.6 223.6 Total revenues 1,859.0 1,470.1
--------------- ------------ ------------ --------------
COSTS AND EXPENSES
101.9 183.6 Research & development 399.8 511.5
99.1 114.5 Cost of goods sold 386.9 474.1
334.4 419.4 Selling, general & administrative 858.0 1,393.8
- 5.2 Severance - 45.3
- (177.9) Gain on disposal of Athena Diagnostics/Abelcet - (177.9)
--------------- ------------ ------------ --------------
535.4 544.8 Total operating expenses 1,644.7 2,246.8
--------------- ------------ ------------ --------------
(47.8) (321.2) Operating income/(loss) 214.3 (776.7)
--------------- ------------ ------------ --------------
(6.8) (17.9) Net interest income/(expense) 8.0 (43.4)
(6.2) (2.9) Business venture funding (23.3) (23.9)
85.4 40.1 Investment gains 175.0 57.4
(16.9) (322.1) Investment losses and other (13.8) (1,588.4)
--------------- ------------ ------------ --------------
55.5 (302.8) Net interest and other income/(loss) 145.9 (1,598.3)
--------------- ------------ ------------ --------------
7.7 (624.0) Net income/(loss) before tax 360.2 (2,375.00)
(4.2) (15.0) Taxation (17.4) (19.8)
--------------- ------------ ------------ --------------
3.5 (639.0) Net income/(loss) 342.8 (2,394.8)
=============== ============ ============ ==============
$0.01 ($1.83) Diluted earnings/(loss) per ordinary share $0.95 ($6.85)
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND
RECOVERY PLAN UPDATE
Page 21
UNAUDITED RECONCILIATION TO
PRO-FORMA INCOME STATEMENT
THREE MONTHS TWELVE MONTHS
ENDED DECEMBER 31, ENDED DECEMBER 31,
2001 2002 OTHER CHARGE HAS BEEN RECLASSIFIED AS FOLLOWS: 2001 2002
US$m US$M REVENUES US$m US$M
- - Product revenues (5.5) -
- - Contract revenues 2.0 -
------------ ----------- ---------- ---------
- - Total revenues (3.5) -
COSTS AND EXPENSES
14.9 76.2 Research & development 78.6 114.4
- 15.6 Cost of goods sold 7.4 57.1
182.6 245.0 Selling, general & administrative 254.6 679.8
- 5.2 Severance - 45.3
- (177.9) Gain on disposal of Athena Diagnostics/Abelcet - (177.9)
------------ ----------- ---------- ---------
197.5 (164.1) OPERATING EFFECT (344.1) (718.7)
- - Net interest income/(expense) (4.6) -
- 37.7 Investment gain - 37.7
(5.3) (324.6) Investment losses and other (6.4) (1,543.8)
------------ ----------- ---------- ---------
(202.8) (451.0) TOTAL OTHER CHARGE (355.1) (2,224.8)
============ =========== ========== =========
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND
RECOVERY PLAN UPDATE
Page 22
UNAUDITED BALANCE SHEET DATA December 31, 2001 DECEMBER 31, 2002 US$M
ASSETS US$m
-------------------------------------------------------------- ------------------------ ---------------------------
CURRENT ASSETS
Cash and cash equivalents 1,572.5 1,005.0
Marketable investment securities 798.4 370.4
Other current assets 608.7 314.1
--------------- ----------------
2,979.6 1,689.5
Intangible assets 2,124.6 1,434.5
Property, plant and equipment 401.1 442.2
Investments and marketable investment securities 858.4 273.6
--------------- ----------------
TOTAL ASSETS 6,363.7 3,839.8
=============== ================
LIABILITIES AND SHAREHOLDERS' EQUITY
Shareholders' equity 3,283.9 874.8
Accounts payable and accrued liabilities 491.8 494.2
Deferred income 331.8 258.2
Investment provision-- EPIL II and III - 543.1
Provision for product payments 267.2 227.2
7.25% senior notes due 2008 650.0 650.0
3.25% zero coupon subordinated exchangeable 951.4 792.3
notes due 2018
Senior unsecured revolving credit facility 2004 325.0 -
3.5% convertible subordinated notes due 2002 62.6 -
--------------- ----------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 6,363.7 3,839.8
=============== ================
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND RECOVERY
PLAN UPDATE
PAGE 23
Q4 2002 YTD 2002
CASH FLOW DATA US$M US$M
----------------------------------------------------------------------------- ------------------- -----------------
Cashflows from operating activities ^ 9.9 130.7
Movement on debt interest and tax (26.3) (88.6)
Working capital movement 149.7 160.1
Net purchase of tangible assets (13.9) (161.6)
Net purchase of investments and marketable investment securities (15.2) (90.7)
Product acquisition payments (49.3) (306.1)
Purchase of Autoimmune product royalty rights - (82.5)
Payment under guarantee re EPIL III - (141.6)
Proceeds of business disposals 443.1 443.1
Cash flows from financing activities (125.9) (520.5)
----------------------------------------------------------------------------- ------------------- -----------------
NET CASH MOVEMENT 372.1 (657.7)
Cash and cash equivalents at beginning of period 632.9 *1,662.7
----------------------------------------------------------------------------- ------------------- -----------------
Cash and cash equivalents at end of period 1,005.0 1,005.0
----------------------------------------------------------------------------- ------------------- -----------------
^ included in cashflows from operating activities are proceeds from the
disposals of Avinza and Actiq totalling $150.0 million
* included in cash and cash equivalents at December 2001 was $90.2 million
related to cash equivalents with an instrument maturity greater than 3
months. This is included in current assets marketable investment securities
in the balance sheet data above.
FINANCIAL INFORMATION RELATING TO QUALIFYING SPECIAL INCLUDING
PURPOSE ENTITIES (QSPES) -TWELVE MONTHS ENDED DECEMBER 31, 2002 AS REPORTED QSPE'S
US$M US$M
------------------------------------------------------------------- ------------------- -----------------
Net loss after other charges (2,394.8) (2,195.2)
Diluted earnings per ordinary share after other charges ($6.85) ($6.28)
Total assets 3,839.8 4,103.7
Total indebtedness 2,965.0 3,262.1
Shareholders' equity 874.8 841.6
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND RECOVERY
PLAN UPDATE
PAGE 24
HISTORIC REVENUE ANALYSIS - PRO-FORMA BASIS
(UNAUDITED) 12 MONTHS 12 MONTHS
TOTAL REVENUE ANALYSIS (US$M) Q4 2001 A Q4 2002A 2001A 2002A
REVENUES FROM RETAINED PRODUCTS
US PROMOTED PRODUCTS
Maxipime 29.3 25.2 86.2 79.2
Azactam 10.9 9.5 46.4 33.0
Zonegran 9.3 6.0 37.8 43.1
Pain portfolio 15.4 18.1 15.4 59.8
Myobloc 2.5 8.0 10.5 17.5
Frova - 4.0 - 11.2
-------------- -------------- ---------- ----------
67.4 70.8 196.3 243.8
US NON-PROMOTED PRODUCTS
Zanaflex 38.1 1.1 161.7 123.5
Other 7.3 4.9 47.3 18.3
-------------- -------------- ---------- ----------
45.4 6.0 209.0 141.8
EUROPE
Abelcet 3.6 0.1 12.2 13.8
Dilzem 3.3 3.6 12.6 12.9
Other 17.4 22.5 61.8 75.9
-------------- -------------- ---------- ----------
Total European products 24.3 26.2 86.6 102.6
CONTRACT MANUFACTURING AND ROYALTIES 26.5 23.3 113.4 105.5
TOTAL REVENUES FROM RETAINED PRODUCTS 163.6 126.3 605.3 593.7
REVENUES FROM DIVESTED PRODUCTS
Skelaxin 37.7 19.9 117.9 145.4
Sonata 2.3 20.5 2.3 92.5
Abelcet 18.5 8.4 77.0 64.6
Dermatology 22.7 9.4 61.8 47.5
Diagnostics 17.1 17.7 57.3 70.6
Actiq/Adalat/Avinza - 35.4 - 37.6
Rationalisation program 21.5 13.3 352.9 69.5
-------------- -------------- ---------- ----------
119.8 124.6 669.2 527.7
CO-PROMOTION FEES
Autoimmune 15.9 - 15.9 38.8
Pharma Marketing/Autoimmune 51.4 - 141.8 24.0
-------------- -------------- ---------- ----------
67.3 - 157.7 62.8
PRODUCT RETURNS - GENERICISATION - (68.0) - (68.0)
TOTAL PRODUCT REVENUE 350.7 182.9 1,432.2 1,116.2
CONTRACT REVENUE
Amortisation of fees 85.9 20.2 283.2 234.7
Research revenue and milestones 23.9 - 58.7 37.2
Pharma Marketing/Autoimmune 27.1 20.5 88.4 82.0
-------------- -------------- ---------- ----------
TOTAL CONTRACT REVENUE 136.9 40.7 430.3 353.9
-------------- -------------- ---------- ----------
TOTAL REVENUE 487.6 223.6 1,862.5 1,470.1
-------------- -------------- ---------- ----------
Exhibit 99.2
Pages 23 and 24 of the attached press release, issued by Elan Corporation,
plc on February 5, 2003 (the "Press Release"), contained certain typographical
errors. Attached hereto are pages 23 and 24 of the Press Release which have been
revised to correct such errors.
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND RECOVERY
PLAN UPDATE
PAGE 23
Q4 2002 YTD 2002
CASH FLOW DATA US$M US$M
----------------------------------------------------------------------- ------------------- -----------------
Cashflows from operating activities ^ 9.9 88.0
Movement on debt interest and tax (26.3) (88.6)
Working capital movement 149.7 202.8
Net purchase of tangible assets (13.9) (161.6)
Net purchase of investments and marketable investment securities (15.2) (90.7)
Product acquisition payments (49.3) (306.1)
Purchase of Autoimmune product royalty rights - (82.5)
Payment under guarantee re EPIL III - (141.6)
Proceeds of business disposals 443.1 443.1
Cash flows from financing activities (125.9) (520.5)
----------------------------------------------------------------------- ------------------- -----------------
NET CASH MOVEMENT 372.1 (657.7)
Cash and cash equivalents at beginning of period 632.9 *1,662.7
----------------------------------------------------------------------- ------------------- -----------------
Cash and cash equivalents at end of period 1,005.0 1,005.0
----------------------------------------------------------------------- ------------------- -----------------
^ included in cashflows from operating activities are proceeds from the
disposals of Avinza and Actiq totalling $150.0 million
* included in cash and cash equivalents at December 2001 was $90.2 million
related to cash equivalents with an instrument maturity greater than 3
months. This is included in current assets marketable investment securities
in the balance sheet data above.
FINANCIAL INFORMATION RELATING TO QUALIFYING SPECIAL INCLUDING
PURPOSE ENTITIES (QSPES) -TWELVE MONTHS ENDED DECEMBER 31, 2002 AS REPORTED QSPE'S
US$M US$M
------------------------------------------------------------------- ------------------- -----------------
Net loss after other charges (2,394.8) (2,195.2)
Diluted earnings per ordinary share after other charges ($6.85) ($6.28)
Total assets 3,839.8 4,103.7
Total indebtedness 2,965.0 3,262.1
Shareholders' equity 874.8 841.6
ELAN REPORTS FOURTH QUARTER AND FULL-YEAR 2002 FINANCIAL RESULTS AND RECOVERY
PLAN UPDATE
PAGE 24
HISTORIC REVENUE ANALYSIS - PRO-FORMA BASIS
(UNAUDITED) 12 MONTHS 12 MONTHS
TOTAL REVENUE ANALYSIS (US$M) Q4 2001 A Q4 2002A 2001A 2002A
REVENUES FROM RETAINED PRODUCTS
US PROMOTED PRODUCTS
Maxipime 29.3 25.2 86.2 79.2
Azactam 10.9 9.5 46.4 33.0
Zonegran 9.3 6.0 37.8 43.1
Pain portfolio 15.4 18.1 15.4 59.8
Myobloc 2.5 8.0 10.5 17.5
Frova - 4.0 - 11.2
-------------- -------------- ---------- ----------
67.4 70.8 196.3 243.8
US NON-PROMOTED PRODUCTS
Zanaflex 38.1 1.1 161.7 123.5
Other 7.3 4.9 47.3 18.3
-------------- -------------- ---------- ----------
45.4 6.0 209.0 141.8
EUROPE
Abelcet 3.6 0.1 12.2 13.8
Dilzem 3.3 3.6 12.6 12.9
Other 17.4 22.5 61.8 75.9
-------------- -------------- ---------- ----------
Total European products 24.3 26.2 86.6 102.6
CONTRACT MANUFACTURING AND ROYALTIES 26.5 23.3 113.4 105.5
TOTAL REVENUES FROM RETAINED PRODUCTS 163.6 126.3 605.3 593.7
REVENUES FROM DIVESTED PRODUCTS
Skelaxin 37.7 19.9 117.9 145.4
Sonata 2.3 20.5 2.3 92.5
Abelcet 18.5 8.4 77.0 64.6
Dermatology 22.7 9.4 61.8 47.5
Diagnostics 17.1 17.7 57.3 70.6
Actiq/Adalat/Avinza - 35.4 - 37.6
Rationalisation program 21.5 13.3 352.9 69.5
-------------- -------------- ---------- ----------
119.8 124.6 669.2 527.7
CO-PROMOTION FEES
Autoimmune 15.9 - 15.9 38.8
Pharma Marketing/Autoimmune 51.4 - 141.8 24.0
-------------- -------------- ---------- ----------
67.3 157.7 62.8
PRODUCT RETURNS - GENERICISATION - (68.0) - (68.0)
TOTAL PRODUCT REVENUE 350.7 182.9 1,432.2 1,116.2
CONTRACT REVENUE
Amortisation of fees 85.9 20.2 283.2 234.7
Research revenue and milestones 27.1 20.5 88.4 82.0
Pharma Marketing/Autoimmune 23.9 - 58.7 37.2
-------------- -------------- ---------- ----------
TOTAL CONTRACT REVENUE 136.9 40.7 430.3 353.9
-------------- -------------- ---------- ----------
TOTAL REVENUE 487.6 223.6 1,862.5 1,470.1
-------------- -------------- ---------- ----------