Advancing science, changing lives

1

Safe Harbor

This is an independent study performed by students from the Faculté des Sciences

Pharmaceutiques of Lille.

The opinions expressed are our own and not necessarily those of Elan Corporation plc.

2

Overview of the company

• Created on 18 December 1969 by Donald Panoz• Became a public limited company in January 1984 • Stock Exchange Listings

– New York Stock Exchange (ELN)– Irish Stock Exchange (ELN.I)

• Elan Corp = 2 business units:

Elan Drug Technology BioPharmaceuticals

Science and clinical based

• Parkinson’s disease

• Alzheimer’s disease

• Multiple sclerosis

Integrated technology

• Oral Controlled Release

• NanoCrystal technology

3

BioNeurology

Elan website28th Annual J.P. Morgan Healthcare Conference, on January 13, 2010

Locations and subsidiaries in 2009

Gainesville, GA• Owned• R&D• manufacturing• administration • 89,000 sq. ft

BermudaFinancial services company

San Francisco, CA• Leased• R&D• sales• administration• 334,000 sq. ft

King of Prussia• Leased• R&D• manufacturing, sales• administration • 113,000 sq. ft

Dublin• Leased• Headquarters• 41,000 sq. ft

Athlone• Owned• R&D• manufacturing• administration • 463,000 sq. ft

http://www.elandrugtechnologies.com/locationsAnnual Report 2009

OCR

NanoCrystal

Others

4

Elan Drug Technology’s pipeline

5Elan website

Elan BioNeurology’s pipeline

Alzheimer’s diseaseMultiple sclerosisCrohn’s diseaseChronic painOther

6Elan website

History with Donald Panoz NanoCrystal and Oral Controlled Release Yesterday : Tricor, Skelaxin, Ritalin, Verelan Today : Ampyra, Invega Sustenna, Zypadhera Tomorrow ?

ElanDrugTechnology

8

Business Overview

9

Elan collaborative model

10Elan website

What is Nanocrystal Technology ?

Technology using tiny drug particles in the nanometre scale The drug size is reduced by a proprietary milling technique GRAS stabilisers are absorded on the nanoparticle to afford agglomeration GRAS stabilizers must be safe and are excipients commonly used in

marketed products ( fat acid, polymers)11

Objective: obtain a colloïdal dispersion

Elan website

Effects of NanoCrystal on bioavailability

12

• Nanocrystal technology is used: For poorly water soluble drugs: ↑ solubility ↑ bioavailability For moderately soluble drugs when high concentration is need in a low fluid volume

• Useful for all dosages forms both parenteral and solid ,liquid oral dosage forms

Point on Oral Controlled Release

13

Avinza, Cardizem, Focalin, Ritalin,Verelan, Luvox, Zanaflex

Naprelan Verelan Afeditab

Yesterday…

14

Trade name Generic name Indication Technology Parteners

Tricor® 145mg fenofibrate Dyslipidemia NanoCrystal

Skelaxin® metaxolone Skeletal-muscular pain NanoCrystal

Ritalin®/ Focalin®

Methylphenidrate/Dexmethylphenidate Hyperactivity OCR

(SODAS)

Verelan® verapamil Cardiac disorders OCR (CODAS)

Tricor® : what’s that?

• API: micronised fenofibrate (prodrug)• Indications: Dyslipidemia type IIa, IIb, IV, III,V

• 2004: Tricor® 145 launched by Abbott and manufactured by Elan using NanoCrystal technology

• Could market lower dosage strength with 9% improve in bioavailability• Minimised food effect:

Class formulation: 30-50% fasting Vs 60-90% while eating Micronized formulation: bioavailability 100% without conditions.

• Patented formulation expiry on 9-Jan-2018

15

Today…

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Trade name Generic name Indication Technology Parteners

Paliperidone palmitate Schizophrenia NanoCrystal

Fosaprepitant dimeglutine

Emetogenic chemotherapy NanoCrystal

Olanzapine Schizophrenia NanoCrystal

Fampridine Cardiac disorders OCR (MXDAS)

16

Ampyra® (Fampridine) : What is it ?

• FDA approval on 22 jan 2010• Indication : improved walking in patients

with multiple Sclerosis • Extended released tablets using Oral release

technology MXDAS

• Mechanism = not fully elucidated => several hypotheses for Ampyra’s mechanism: Fampridine is a broad spectrum potassium

channeblocker Fampridine increases conduction of action

potentials in demyelinated axons through inhibition of potassium channels

Increase acetylcholine release at the neuromuscular junction

17

®

Ampyra®: the deal

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Elan and Accorda, a joint venture since 1998 for MS

rest of the world marketing

16% of royalties for elan manufacture in Athlone’s facility

Biogen paid:upfront: US$ 110 millionsmilestones: US$400 millions

US$35.7millionsfrom Accorda for thedrug delivery

http://seekingalpha.com/article/184252-acorda-after-fda-approval-what-s-next-for-ampyrahttp://www.iguanabio.com/acorda-biogen-in-ex-us-deal-for-fampridine-sr-no-us/

Ampyra®’s forecast sales

19

• Represents the sales in U.S• Ampyra will be launched in March 2010

… and tomorrow for Elan Drug Technology

20Elan website

Elan BioNeurology Yesterday : Azactam®/Maxipime®, Prialt® Today : Tysabri ® Tomorrow :

• Alzheimer Immunotherapy Program• Research in Parkinson’s disease

21

Timeline of Elan’s marketed products

• Maxipime® (Cefepime)

• Azactam® (Aztreonam)

• Tysabri® (Natalizumab)

• Prialt® (Ziconotide)

• AIP Program

1996

1998

1995

2000

Beginning of a new business unit called Elan Biopharmaceuticals, then Elan BioNeurology 22

• From 1969 to early 1990’s : Elan only worked in drug delivery domains• Then, Elan’s activities widened with collaboration from research to market of drugs

Maxipime® (cefepime) : what’s that?• Semi-synthetic forth-generation cephalosporin• Mechanism of action :

– Inhibits final transpeptidation of peptidoglycan synthesis in bacterial cell walls– inhibiting cell wall biosynthesis

• Broad spectrum activity• Indications

– respiratory tract infection– skin infections– urinary tract infections– febrile neutropenia– Intra-abdominal infections

23Thomson

Maxipime® (cefepime) revenues

24

- 78%

Bristol-Myers Squibb CoElan Corp plc

USD

(Mill

ions

)

Annual report 2009Thomson

Prialt® (ziconotide)

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Prialt® (ziconotide) : what’s that?

Member of the ω conotoxin family o 25 aminoacids and 3 disulfide bondso prepared by chemical synthesis

Targets N-Type voltage sensitive calcium channels = > diminished neurotransmitter release

Pain Transmitting

nerves

Pain signal

Ziconotide

Calcium

N-type calcium channel

Intrathecal formulation

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History of Prialt® (ziconotide)May 1993 Neurex (now Elan) joined Warner-Lambert (now Pfizer) in a collaboration to cooperate in the

development and commercialization of ziconotide for the treatment of brain ischemia

early 1995 phase II trials for the prevention of brain damage halted due to some patients experiencing hypotension. Neurex received permission from the FDA in May 1995 to resume these trials

Aug. 1999 9th World Congress on Pain meeting in Vienna, Austria : results of a placebo controlled study into the use of intrathecal ziconotide in the treatment of chronic pain in opioid-resistant non-cancer patients

May 2001 37th ASCO meeting in San Francisco : clinical data for chronic pain in cancer and AIDS patients

9 Jul. 2001 Orphan designation granted by the European Commission

Feb. 2002 Elan had reached an agreement with the FDA and had agreed to conduct one additional phase III

2004 Pain Management 2004 meeting in London, UK 4th annual conference on Ion Channels in Drug Discovery Development in Philadelphia, PA.

Apr. 2005 Lauch market in the USA

Mar. 2006 Eisai acquired the European rights to ziconotide from Elan Elan received ~ $60 million for the launch in key European markets +$40 million contingent on Prialt achieving revenue related milestones in Europe.

2016 Expiration of fundamental U.S. patent covering the use of ziconotide

27Thomson

Tysabri® (natalizumab)

28

Tysabri® (natalizumab) : what is it ?

• Humanized Monoclonal Antibody (recombinant IgG4)• Targets selectively human α4-integrine • Trade names : Tysabri®, Antegren®

Integrines α-4 • Expressed on cell membrane • In association with β1 or β7 integrines • Adherence molecules on activated T-cells, B-cells, monocytes, eosinophils, basophils, leukocytes, NK cells, dendritic cells, and vascular endothelium of some organs.• Implicated in leukocytes homing to CNS and GIT

29GASTROENTEROLOGY, 2009, Vol. 136, Issue 4, 1182-1197M/S : medecine sciences, vol. 21, n° 10, 2005, p. 797-798.Drug Discovery Today Volume 12, Numbers 13/14 July 2007

Tysabri® dealings

30Thomson

Tysabri®’s timeline

18 MONTHS

31Drug Discovery Today Volume 12, Numbers 13/14 July 2007Nature Biotechnology, Nov 2009,vol 27, Numero 11

Tysabri® and PML

• 25-Feb-2006: Confirmation of 3 cases of PML (initial trials: 3,417 patients) 2 patients during MS trial (SENTINEL) + 1 patient in trial for Crohn’s disease All 3 were on combination therapy with another immunosuppressive drug No patients on Tysabri alone developed PML

• Progressive Multifocal Leucoencephalitis = opportunistic disease Agent = JC virus (Polyomavirus family) infects oligodendrocyts => local demyelinisation => neurologic dysfunction ~ 80% of population already met JCV before adult age => latent form (bone

marrow and kidneys)

• Natalizumab + another immune drug fixation of natalizumab on VCAM-1 and MAdCAM-1 of endothelial cells inhibition of T-cells homing uncontrolled replication of JCV in CNS

32N Engl J Med 2006;354:924-33.

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Consequences on the stock

34

25-Mar-2005 26,90 $

28-Mar-2005 8,00 $

ELAN

28-Mar-2005 38,65 $

25-Mar-2005 67,28 $

BIOGEN -50%

-67%

Yahoo finance

Tysabri®’s REMS: TOUCH® program

• 7-8 March 2006 : Risk Minimalisation Action Plan exposed to Peripheral and Central Nervous System Drugs Advisory Committee Meeting => Goals : o Warn patients about risk-benefit balance forTysabri use in treatment of MS patients.o Contraindicated in immunocompromised patients o Minimize health consequences of PML (death/disability) through early diagnosis

• Key elements of Tysabri Outreach: Unified Commitment to Health program o Mandatory enrollment of prescribers, infusion sites, and afflilated central pharmacieso Controlled distribution to authorized infusion sites and pharmacieso Education program for health care providers and patientso Safety surveillance of PML, serious opportunistic infections, and deathso Program evaluation of health outcomes, process compliance, and assessment of

knowledge

35Business Insights, 2009 « THE AUTOIMMUNE OUTLOOK TO 2013, Competitive landscape, pipeline analysis and growth opportunities »Joint Meeting of the Gastrointestinal Drugs Advisory Committee and the Drug Safety and Risk Management Advisory Committee, 31-Jul-2007

The benefit

• Natalizumab versus β-IFN is:- Sligthly more effective (MRI data)- Twice as effective (relapse-rate data)- More effective (EDSS data)

• Many people strongly believe that Natalizumab is the most effective drug we currently have.

• Patients asked the right to choose and accept the risk

Tysabri returned to the US market in July 2006Tysabri returned to the US market in July 200636

Top 5 Multiple Sclerosis Drugs in 2007 (m$)

37

Will Tysabri marketing setback affecting its own sales and Elan’s business ?

N°5 !

Tysabri® sales rose, fell… then rise again!

38

Forecast Tysabri in-market net sales in 2013 : 1,3 b$NB: Expected patent expiry by 2015Life cycle management:

natalizumab SCextension of indication to multiple myeloma

Nature Biotechnology, novembre 2009, vol 27, numero 11 Business Insights, 2009 Natalizumab, Thomson 2009 28th Annual J.P. Morgan Healthcare Conference, on January 13, 2010

2005 2011

Injectables

IV

TeriflunomideTeriflunomide

LaquinimodLaquinimodFTY 720FTY 720

Oral CladribineOral Cladribine

DaclizumabDaclizumabGeneric Mitoxantrone (oncology) (MS)

Generic Mitoxantrone (oncology) (MS)

Orals

TysabriTysabri

IV

2006 2007

Copaxone

Betaseron

Avonex

Novantrone

RituximabII - RRMS; III - PPMS

RituximabII - RRMS; III - PPMS

Rebif

2010 2012

MLN1202MLN1202

BG 12 Oral FumarateBG 12 Oral Fumarate

Fampridineambulation indication?

Fampridineambulation indication?

MBP 8298MBP 8298

Filed

approved In phase II

In phase III

SB683699SB683699

2013

Campath

Existing and Emerging Therapies for MS

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Alzheimer’s disease

40

http://www.ihsglobalinsight.com/SDA/SDADetail17223.htm

The Alzheimer Immunotherapy Program

41

Two approaches for Alzheimer’s disease

42Mécanismes Moléculaires dans les Démences Neurodégénératives Inserm-UM2-EPHE U710La maladie d’Alzheimer : aspects moléculaires, diagnostiques et thérapeutiquesOctobre 2009

Neuropsychopharmacology (2009) 34, 142–158;doi:10.1038/npp.2008.115

Figure 6

3 approaches in the Beta amyloid cascade

44

Tomorrow : AIP

45

Janssen Alzheimer Immunotherapy

BapineuzumabACC-001

Follows-on

28th Annual J.P. Morgan Healthcare Conference, on January 13, 2010

BioCentury, the Berstein report on biobusiness July 6, 2009 Page A22 of 37http://www.ihsglobalinsight.com/SDA/SDADetail17223.htm

$885 M

18,4% Elan's capital

IP Elan (AIP)Estimated at $500 M

$ 500 M

49,9% Janssen AI's capital

RoyaltiesUnder conditions

The Deal

46

The Deal

47BioCentury, the Berstein report on biobusiness July 6, 2009 Page A22 of 37

Transaction

J&J purchased 107.3 million Elan's shares at $8,241/share

J&J also agreed not to acquire any more shares for the next five years

The program will remain partnered with Wyeth, which was acquired by Pfizer Inc (01/2009, $68 billion)

Royalties : ONLY after J&J has earned profits from the AIP equal to its $500 M

Janssen AI: all annual in-market sales Royalties for Elan

$2 billion - $4 billion 5 %

$4 billion - $ 10 billion 7 %

> 10 billion 9 %

Bapineuzumab (AAB-001)

48

• Name: AAB-001• Other Name: Bapineuzumab• Class: Humanized monoclonal antibody• Therapeutic Applications: Mild to moderate AD• Therapy Types: Protein : humanized monoclonal antibody against Aβ• Mechanisms: Designed to bind and remove the Aβ peptide that accumulates in

the brain• Development Status: Fast Track status from FDA in U.S• FDA Phase: Phase III• Side Effects:

– Passive immunotherapy will induce similar side effects is largely unknown. One report has shown that frequency and severity of cerebral microhemorrhage

– Vasogenic edema

Thomson

Bapineuzumab (AAB-001) : Phase III

49

Design Multicentrique, randomized, double-blind, placebo-controlled, parallel-assigned trial, studies

4 studies : 2 with ApoE4 (+) & 2 withApo E4 (-)

2 US trials and 2 European phase III trial

Safety Objective The safety and tolerability

Estimated study

Duration 18 Months

Dosing 0.5 mg/kg

1 mg/kg

Source : http://www.elan.com/Images/Bapineuzumab%20_AAB-001_%20Backgrounder%20Final_tcm3-20147.pdf http://clinicaltrials.gov/ct2/show/NCT00574132?term=bapineuzumab&rank=1 http://clinicaltrials.gov/ct2/show?term=bapineuzumab&rank=4

Development Fast Track designation from the FDA

Forecast sales and market share for bapineuzumab

502010 THOMSON REUTERS

Research on Parkinson’s disease

• Several active early discovery efforts in Parkinson’s disease

• The Michael J. Fox Foundation for Parkinson’s Research Program « Novel Approaches to Drug Discovery »

• In 2009, the program funded six research projects.

• 2006 : Michael J. Fox Foundation and Elan Commit up to $2 Million to Drive Novel Therapies for Parkinson's

51Annual report 2009MJFF website

Our opinion about Elan Corporation plc.

• Financial Analysis• SWOT• Would we join Elan?

52

Major owners of Elan Corp. at 22-Feb-10

53Annual Report 2009

Total product revenue for 2009

54

724,3m$

81,4m$16,5 m$ 13,2m$ 1,7m$

61,6 m$

34,9 m$ 32,6 m$ 22,1 m$

106 m$

18,7 m$0 m$

Annual Report 2009

Revenues from marketed products of BioNeurology

55Annual Reports

Elan Drug Technology: total revenue

56Annual Reports

Five years performance : EBITDA improvement

2005 2006 2007 2008 2009

57Annual Reports

Operating margin

58Annual Reports

2008US$m

2009US$m

Assets

Current Assets

Cash and cash equivalents 375.3 836.5

Restricted cash and cash equivalents -- current

20.2 16.8

Investment securities -- current 30.5 7.1

Deferred tax assets -- current 95.9 23.9

Other current assets 240.1 274.9

Total current assets 762.0 1,159.2

Non-Current Assets

Intangible assets, net 553.9 417.4

Property, plant and equipment, net 351.8 292.8

Equity method investment -- 235.0

Investment securities -- non-current 8.1 8.7

Deferred tax assets -- non-current 145.3 174.8

Restricted cash and cash equivalents -- non-current

15.0 14.9

Other assets 31.5 42.9

Total Assets 1,867.6 2,345.7

Liabilities and Shareholders' Equity/(Deficit)

Accounts payable, accrued and other liabilities 334.8 311.5

Long-term debt 1,765.0 1,540.0

Shareholders' equity/(deficit) (232.2) 494.2

Total Liabilities and Shareholders' Equity/(Deficit)

1,867.6 2,345.7

The consolidated Balance Sheet

59Annual Report 2009

Elan’s debt 2005-2009

Due dates :• November 2011:300 m USD• December 2013: 615 m USD• October 2016: 625 m USD

Elan's long term debt

0

500

1000

1500

2000

2500

2005 2006 2007 2008 2009

mil

lio

ns

US

D

Strong indebtedness => the success of AIP is essential Elan plc is restricted among various other things :

• Incur additional debt• Enter into transactions with related parties• Enter into some types of investment transactions; • Engage in some asset sales or sale and leaseback transactions• Pay dividends or buy back our ordinary shares• Consolidate, merge with, or sell substantially all our assets to another entity

Widen their capital

60Annual Report 2009

61Annual Report 2009

Five years performance : cost management

Approximate 5 years change

↑ > 30%

↓ > 20%

Reduced SG&A and reinvest savings in R&D

6228th Annual J.P. Morgan Healthcare Conference, on January 13, 2010

Number of employees in Elan corp.

Year R&D activities

Manufacturing and supply activities

Sales and marketing activities

General and administrative area Total

2005 471 583 310 365 1729

2006 494 543 328 369 1734

2007 553 547 211 299 1610

2008 656 601 123 307 1687

63Annual Reports

Elan’s lawsuits

64

Evolution of the stocks

65

AN1792 +

Wolf popper LLP

Launch of Tysabri

Tysabri withdrawal

Results of Bapineuzumab

Clinical Trial

Yahoo finance

Strengths

•Leadership position in drug delivery

•Tysabri, its key product, sustaining the revenue growth

•Strategic alliances bolstering the company’s business

Weaknesses

Important endebtedness

•patent expiry and risk of generic competition

•Geographic concentration enhancing business risk

•Tysabri marketing restricted indications affecting Elan’s business

Opportunities

• Focus on Alzheimer’s market, could be a source of revenues •Benefits to accrue from growing incidences of neurological disorders

•Favorable demographic shift increasing Alzheimer drug market

Threats

• Intense competition from Avonex, Rebif against Tysabri in the MS drug market.

•Patent expiries could affect company’s Revenues

•Legal proceedings could affect company’s Reputation

•Reimbursement policies could affect company’s product sale

66

Conclusion

• An important debt and short due dates.• Cash flow left only for 12 months!…• Tysabri revenues will not be enough.• No more constant revenues from BioNeurology

business unit.• Elan depends on the success of the AIP, especially

on bapineuzumab success.• So ?…

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Thanks for your attention! Any question?

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