Elan Corporation's CEO Discusses Q4 2012 Results - Earnings Call Transcript
February 6, 2013 3:06 PM ET
Elan Corporation, plc (ELN)
Q4 2012 Earnings Conference Call
February 06, 2013, 08:30 AM ET
Kelly Martin - CEO
Nigel Clerkin - EVP & CFO
David Marshall - VP, IR
Corey Davis - Jefferies & Company
Richard Parkes - Deutsche Bank
Marshall Urist - Morgan Stanley
Jack Gorman - Davy Stockbrokers
Michael Yee - RBC Capital Markets
Erin Blum - Goldman Sachs
Vincent Meunier - Exane BNP Paribas
William Tanner - Lazard Capital Markets
Jake Kemeny - Morgan Stanley
Guillaume Van Renterghem - UBS
Ladies and gentlemen, thank you for standing by. Welcome to the Elan Corporation Q4 2012 Financial Results Conference Call. During the presentation, all participants will be in listen-only mode. After which we'll conduct a question-and-answer session. (Operator Instructions). As a reminder, this conference is being recorded, Wednesday, February 6, 2013.
I would now like to turn the conference over to David Marshall, Vice President, Investor Relations. Please go ahead, sir.
Thank you, Dimitra. Good morning and good afternoon, everyone. Welcome to Elan's fourth quarter 2012 financial results call. If you have not reviewed our press releases, please go to our website at www.elan.com where you will find it. On today's call will be CEO, Kelly Martin; and CFO, Nigel Clerkin.
Before we begin, I would review Elan's Safe Harbor statement. Today's call will contain forward-looking statements about Elan's financial condition, results of operations, business and research prospects and whether the proposed Tysabri transaction will be consummated. These forward-looking statements involve substantial risks and uncertainties that could cause actual results to differ materially from those described or projected. A list of these risks and uncertainties are included in our fourth quarter 2012 financial results press release, and in our 2011 Annual Report on Form 20-F and our forms 6-K filed with or furnished to the Securities and Exchange Commission.
Elan assumes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise. In addition, today's conference call and webcast will include non-GAAP financial measures such as adjusted EBITDA. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in today's press release.
I'll now hand the call over to Kelly Martin.
Thanks, David. Good morning, good afternoon to everybody. On behalf of our Chairman, Bob Ingram and myself, we're delighted to have you spend some time with us this morning to hear about activities and progress at Elan. Joining myself on the call is our Chief Financial Officer, Nigel Clerkin, and he will follow my brief introductory comments with more thorough comments regarding some of the specifics. Post our comments, we're happy to answer any questions you may have.
I'll cover two broad topics; first and foremost our results for 2012. Just remind people, we had another year of progress of repositioning and advancement of our company. Top line revenue grew 13%. We advanced ELND005, our small molecule into two Phase 2 indications; one for bipolar and one for AD agitation. We continued through the great work of our teams to strengthen our balance sheet by refinancing our debts and then recently monetizing the balance of our Alkermes shares. And last but not least, in the middle of the year, we announced a spinoff of our high-quality, high-caliber discovery science activity of the West Coast and formed what is now called Prothena which is a public company of which we are a reasonably significant shareholder.
So from an activity point of view in 2012, we remained busy, active and moved things forward in a way that we thought made the most sense for shareholders and provided us with both flexibility and optionality moving forward. This morning, we also announced the second topic of the Tysabri/Biogen transaction. I will spend a few minutes on that before turning the call over to Nigel. The benefits for us of doing that transaction; first and foremost on behalf of both Biogen and ourselves is to simplify the business structure around the assets, which we hope will benefit in the long term the patient population and the clinicians who are deciding on clinical use around the world.
Secondly, for us we had an ability to bring forward a portion of the value of Tysabri. We believe that Tysabri remains a very significant asset with a long-term prospect for growth, and we want to bring some of that forward so we can redistribute some of that value which I'll talk about in a few seconds. Last but not least, another benefit is we will maintain a meaningful participation in the long-term cash flow of this asset. I would emphasize that that's all indications including relapsing, remitting MS should the trials be successfully in secondary progressive, it would include that and other lifecycle opportunities such as stroke and other things, which Biogen and Elan have spoken about for years are also potentially on the floor in years out.
The goals of us doing the transactions; number one is to give us the ability and the wherewithal to diversify our business and diversify our risk around different parts of the industry value chain, number one. Number two, to achieve a balance in those business assets; that balance would allow for income producing assets, clinical assets and a smattering of some scientific activity and investment. Thirdly, this is an industry that is long term, it's dynamic, it's full of both anticipated but more importantly unanticipated risks. So our goal is to get to a self-funding and a self-sustaining business with diversification to allow for long-term investments and growth. And last but not least, this transaction and others that will follow will continue to leverage our very unique and advantageous business and financial structure as an Irish-based EU company.
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