BIOPHARMA GROUP Elan reported lower revenue for the second quarter of the year as a rise in sales of multiple sclerosis drug Tysabri failed to offset declines on older drugs.

Tysabri reported a 20 per cent increase in revenue year on year and now accounts for more than three-quarters of all sales.

The company said a combination of older drugs coming off patent and greater generic competition had dented sales at the drug technologies division (EDT).

Chief financial officer Shane Cooke said the company had stated this year would see a transition from older to newer drugs at the unit.

The company hinted that it would not rush a decision on spinning off its drug technology unit, centred in Athlone.

On a conference call yesterday, Mr Cooke said a key question in any separation of the group from the bioneurology business was that it needed to be done at “an appropriate price, an appropriate valuation. That depends on market conditions. Market conditions at the moment would not be conducive.”

Company president Carlos Paya said Elan was not unduly alarmed by the progress of Gilenia, an orally administered MS treatment from Novartis that is nearing final FDA decision.

Dr Paya said the drug had a number of side effects which was likely to result in a “significant risk management programme if it gets approval”.

He said he was counting on it being approved but said its efficacy would not challenge Tysabri. Any impact by Gilenia in the MS drug segment was likely to hit other drugs harder, he stated.

On Tysabri, the company outlined progress on trials to minimise the risk of patients succumbing to its main side effect, a dangerous brain condition PML.

The company said it was comfortable to put behind it the inquiry into unauthorised marketing of one of its former products, Zonegran. Elan has provisionally been hit with a $203 million (€157.5 million )fine – accounting for almost all its sales of the drug over a five-year period.

The company dismissed criticism from shareholder Ib Sonderby, who sent an open letter to the company overnight, criticising the board’s stewardship.

“Many of the matters Mr Sonderby raises in the letter have been addressed previously, and we regret that he appears seriously misinformed on others. Contrary to his assertions, we have engaged with him in the past and remain open to doing so,” Elan said.