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ELAN HOLDS 25% OF U.S. ENTERAL FOODS MARKET

Executive Summary

ELAN HOLDS 25% OF U.S. ENTERAL FOODS MARKET for the critically ill through its O'Brien-KMI subsidiary, Elan President James O'Brien told a recent analysts meeting in New York City. O'Brien-KMI's Reabilan elemental diet for the critically ill is used primarily in cancer, AIDS and head trauma patients. "In that elemental market, I would estimate today, two-and-a-half years after launch, we probably have 20-25% of the market," O'Brien said. The company made a presentation to the New York Society of Securities Analysts on March 30. O'Brien-KMI lost money during the past fiscal year, O'Brien told analysts, but he predicted the enteral subsidiary would turn a profit in the coming year. "We have completely reformulated a number of products," he reported. "We've changed manufacturing sites to improve our costs of goods, we've lowered overhead." O'Brien-KMI "as of today...is a positive contributor" to Elan's earnings, Elan CEO Donald Panoz stated. Elan, headquartered in Athlone, Ireland, formed O'Brien-KMI out of two enteral nutrition firms it acquired in 1988: O'Brien Pharmaceuticals (Parsippany, New Jersey) and Knight Medical of Cambridge, Mass. ("The Pink Sheet," Nov. 7, 1988, T&G-8). In addition to its elemental diet products, O'Brien-KMI markets other medical food supplements and enteral food administration equipment. O'Brien-KMI's sales force of 40 and network of 13 distribution centers to hospitals, nursing homes and home-health care services eventually could enable Elan to directly market its own products in the U.S., Panoz suggested to analysts. As an example, Panoz pointed to Elan's EL 1335, a "steroid-like" antibiotic expected to enter clinical studies by the end of 1990. The antibiotic could be directly marketed through O'Brien-KMI to its current customer base of facilities caring for the critically ill, Panoz believes. Elan's market access, both in the U.S. and in Europe, is currently dependent on licensing and joint ventures, such as the firm's joint venture with Connaught to market Elan's pediatric suspension products in the U.S. ("The Pink Sheet" July 7, 1988, T&G-1). O'Brien-KMI could also be a vehicle for marketing Elan's Panoderm electrically stimulated transdermal drug delivery system, according to Elan. The Panoderm system, which would reduce the need for injections and physician visits, would be a good fit for O'Brien-KMI's market segments, "particularly the nursing home environment," Panoz said. Elan announced March 30 that it had licensed Panoderm, a patented wristwatch-like system for the transdermal delivery of peptides, narcotics and cardiovascular drugs, from the Swiss Corporation for Microelectronics and Watchmaking Industries, Ltd., the makers of Swatch and Longines timepieces. The Swiss firm will develop and manufacture the microcircuitry and casing of the programmable wristwatch-type device, which will feature disposable drug cartridges manufactured by Elan. * In its core business of sustained-release pharmaceuticals, Elan has a slew of products in late development/pre-approval stages, starting with a once-daily formulation of diltiazem, Diltelan. Marion Merrell Dow, for whom Elan developed the twice-daily diltiazem Cardizem SR, filed a U.S. NDA in February for Diltelan. Diltiazem-pioneer Tanabe Seiyaku has filed an NDA in Japan for Elan's new formulation. Elan also has NDAs pending for Nicolan, its transdermal nicotine patch, licensed to Parke-Davis; once-daily nifedipine (Pfizer's Procardia), licensed in the U.S. to Miles (the originator of nifedipine); once-daily verapamil (Searle's Calan); theophylline once-daily and theophylline liquid suspension, licensed in the U.S. respectively to Robins and Riker; erythromycin in a twice-daily pediatric liquid formulation, in a joint venture with Connaught; and the antihypertensive methyldopa. Currently in clinicals at Elan are a liquid suspension acetaminophen, licensed to McNeil in the U.S.; and new sustained release formulations of albuterol, amoxycillin, carbamazepine, diclofenac, ergoloid mesylates, ibuprofen, ketoprofen, prazosin, sulindac, propranolol, and indomethacin. Elan, which will have revenues of approximately $45 mil. in U.S. dollars in the current fiscal year "expects to be at $200 mil. by 1993...putting together the approvals, the NDAs, the joint ventures and our marketing operations," Panoz and O'Brien told the analysts.
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