Elan's risk would be substantially less if got rid of its incompetent and unethical mgmt team. Its very hard to support a mgmgt team with the type of SG&A Elan has without any products to sell and a very tiny pipeline to manage (only 1 drug in active development). Not to mention that the CEO works from home, the penchant for flying private jets (even when it is to fly across country to annoucne the layoff of 120 scientists). The management is one of the worst i have ever seen.
So obviously, Elan is very very high risk. But besides that, i do think there is a huge upside potnetial if the AIP Alzheimer's Program now being run by pfizer/JNJ is successful. Elan still owns 24.9%
Bapineuzumab results are due in Q3 12. If the results are positive in both the ApoE carrier and non-carrier population, i think the drug could generate $10-$15Billion in sales.
If the results are positive only in non-carrier (as was the case in phase 2), then i think it could still generate $4-$6Billion in sales.b Of course the phas 2 was very poorly designed and the results seemed a little odd (placebo did worse than placebo in any other AD trials),
I put the odds of success in non-carrier near 60% and carrier around 25%.
As for tysabri, I think the assays may help, but it is late in the game and they now have more competition. I don't see Tysabri ever passing 1.5 B in sales (curently $1.2B).
And of course Elan has a nastly little spending and cost control problem so they might blow any possible rewards anyway, but there is potential.
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