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With a bright new future following restructuring, Dublin-based Elan sees former executives establish exciting new businesses in Ireland, while it continues its own strong R&D program.
Elan Corporation, PLC, is a neuroscience-based biotechnology company focused on discovering, developing, manufacturing, and marketing advanced therapies for neurology, autoimmune diseases, and severe pain. Head-quartered in Dublin, Ireland, the company operates on a global basis and has locations in Athlone, Ireland, Bermuda, Japan, and the United States. Elan shares trade on the New York, London, and Dublin Stock Exchanges.
Elan is unique in an Irish context because it possesses the range of expertise required to develop, test, validate, manufacture, market, and broker international contracts in Ireland. In 2002, more than $18.4 billion was wiped off Elan's value following a consent decree issued by the US Food and Drug Administration (FDA) and an investigation into the company's accounting practices. By February 2004, Elan had completed a recovery and restructuring plan that resulted in divestiture proceeds of more than $2 billion. The settlement of the US Securities and Exchange Commission's investigation, announced in February 2005, removed this uncertainty about Elan's future and allowed the company to focus more on bringing its innovative science to patients.
Elan's future now looks bright, and the restructuring of the company provided both a stimulus and an opportunity for the emergence of more than half a dozen new companies headed by former Elan personnel.
Some of the largest private equity transactions in Ireland over the past couple of years have involved companies with some form of connection to Elan. Most recently, Azur Pharma Limited raised €40 million to fund a strategy based on in-licensing rights to products that have either received FDA approval, or that are in late-stage clinical development. Azur Pharma's founding team includes chairman and chief executive officer Seamus Mulligan who, as executive vice-president of business and corporate development at Elan, led the $2 billion asset-disposal program that enabled the company to restructure its balance sheet and stave off bankruptcy.
Another company with ties to Elan is AGI Therapeutics Limited. It is led by John Devane, who was formerly executive vice-president of research and development at Elan. He raised €9.5 million in first-round funding in 2004 to develop a pipeline of therapies targeting functional gastrointestinal disorders such as irritable bowel syndrome and dyspepsia.
A third example is Merrion Pharmaceuticals, Inc. This Irish-American firm has operations in Dublin and in Wilmington, North Carolina. It was founded to continue the progress of drug delivery technologies originally developed by Elan.
In addition, a slew of service-oriented firms have also emerged, including PharmaPlaz, an ambitious firm offering process development, clinical development, and manufacturing services. PK Pharma Innovations Limited is a specialist provider of pharmacokinetic analytical services. And InfoSight Corporation is offering specialist statistical services to companies in the pharmaceutical industry, food industry, and medical device sector, and to research groups conducting clinical trials.
These post-Elan ventures fall into two distinct categories. Azur, AGI Therapeutics, and Merrion and are engaged in the high-risk activity of drug development, which has potentially high rewards. The others are more service-oriented and, consequently, are able to tap into an immediate revenue stream.
BioClin Research Laboratories was established by CEO Mary Burke, who previously was responsible for clinical pharmacology at Elan, and by chief scientific officer Brian McKenna, who had managed Elan's bioanalytical laboratory. BioClin secured a lease on Elan's 6000-ft2 , purpose-built bioanalytical facility. The laboratory is the largest of its kind in Ireland. It enables BioClin to offer services to a growing number of small drug discovery and drug delivery companies that have limited development capabilities, and to virtual organizations that do not operate their own wet laboratories.
Regarding the BioClin venture, Burke and McKenna jointly commented, "We felt there was a niche for a high-class, regulatory-compliant research organization, and the restructuring gave us the final push to do it."
Initially, BioClin started out providing bioanalytical support during preclinical and Phase I clinical development, including both methodological development and analysis of pharmacokinetic data. "We have broadened that out to an integrated package as well," Burke says. The company, which was profitable in its first year, now has a broad range of facilities for mass spectrometry, chromatography, and immunochemistry. "We've invested back about €600,000 in upgrading our equipment," says Burke. BioClin can offer trouble-shooting, and it is currently adding assay development services. Burke explains, "We're expanding into becoming a broader contract development organization." That may involve an acquisition, she says, to enable the company to enter the drug formulation area as well.
Ena Prosser, a former Elan executive, is now in the process of helping to create a dedicated biotech venture capital fund. Colin Sainsbury, previously vice-president and general counsel at Elan, has set up a legal practice dedicated to life sciences at BCM Hanby Wallace, one of Ireland's largest and best-known law firms. Sainsbury notes, "Working in Elan for 10 years enabled me to gain huge experience in the legal and commercial aspects of the life sciences sector. It was also a great learning ground for building and developing international long-term relationships, which are an imperative in the life sciences sector."
Elan's Drug Technologies division is performing very strongly, and its recently announced third-quarter revenue doubled for 2005 over 2004. The facility at Athlone has seen $178 million of investment in the past three years, including new sterile fill–finish line and nanocrystal technology. Current employment levels are at approximately 540 onsite, including a large team of scientists.
Elan's proprietary NanoCrystal technology is especially exciting. Elan is working with many pharmaceutical companies to help them to manage their products' life cycles and also to reformulate products to deliver significant benefits to patients with greatly increased bioavailability. As an example, Elan worked with Par Pharmaceutical Companies, Inc, to reformulate its Megace product, which helps AIDS patients gain weight. Previously patients had to ingest 20 mL of a thick liquid, with food. Thanks to Elan's NanoCrystal delivery system, Megace can now be taken on an empty stomach and is 16 times less viscous than it was originally. In addition, patients need take only 5 mL instead of 20 mL.
To date, four pharmaceutical products have been commercialized that incorporate NanoCrystal technology. Several additional NanoCrystal-related product launches are anticipated over the next two years. Elan is in negotiations with a number of additional companies, and Elan scientists are investigating the NanoCrystal application across a large range of drugs.
Elan's Prialt (ziconotide intrathecal infusion) is the first innovation in the treatment of severe chronic pain in 25 years. It was approved in the US in December 2004 and launched in the US in the first quarter of 2005. The drug was inspired by the hunting ability of the tiny but deadly South Sea snail, conus magnus. The snail, though only inches long, uses its venom to paralyze its prey for hours, so it can feed at leisure. It was found that one of the peptides in the snail's venom blocks N-type calcium channels and prevents pain signals from reaching the brain. Elan has synthesized this peptide to produce Prialt, which as a non-opioid does not depress the respiratory system or result in withdrawal effects. Reaction from physicians and patients using Prialt has been very positive.
Following the voluntary suspension of the multiple sclerosis medication Tysabri in February 2005 by Elan Pharmaceuticals and Biogen Idec, the companies have completed a detailed safety evaluation and review. This investigation yielded no new confirmed cases of progressive multifocal leukoencephalopathy. Among patients taking Tysabri, three cases had previously been identified, of which, sadly, two were fatal. The companies have filed a supplemental biologic license application with the FDA and with European authorities, and a decision on Tysabri's return to market will be made during 2006. Elan remains very confident about the value of Tysabri, especially to patients with multiple sclerosis, which has a high unmet medical need.
Elan is building on its breakthrough research and extensive experience in Alzheimer's disease and is also studying other neurodegenerative disorders, such as Parkinson's disease. Two of Elan's compounds from the Alzheimer's disease immunotherapy program, in collaboration with Wyeth, are currently progressing through clinical trials. Dosing of patients with ACC-001 in a Phase I clinical trial began in the third quarter of 2005. Phase II trials of the humanized monoclonal antibody AAB-001, designed and engineered to remove the neurotoxic beta-amyloid peptide that accumulates in the brains of patients with Alzheimer's disease, began in the first half of 2005.
As it emerges from a challenging period, Elan Corporation remains committed to filling significant unmet medical needs by bringing scientific innovations in science to market. Its proprietary NanoCrystal technology offers substantial patient benefit, and its research in the areas of inflammatory and neuropathic pain, autoimmune diseases, and neurology hold promise to relieve patient suffering.
Paradoxically, the company's challenges also have spawned broader growth in the Irish biopharmaceuticals industry. Former Elan executives have launched new companies such as Azur Pharm Limited, AGI Therapeutics Limited, Merrion Pharmaceuticals, Inc., PharmaPlaz, PK Pharma Innovations Limited, InfoSight Corporation, BioClin Research Laboratories, and a venture fund and a life sciences law practice. Focused on a range of services ranging from new therapeutic areas to drug delivery and analytical support services, these companies are contributing to the strengthening of the biopharmaceuticals sector in Ireland.