Background: The suspension of Elan's blockbuster Multiple Sclerosis drug, Tysabri, less than three months after it was first approved by the US Food and Drug Administration is just the latest blow for a company that has suffered more than its share of misfortune in the risky pharmaceutical sector.
The company founded to design drug delivery systems and housed in the back garden of founder Don Panoz in 1969, grew rapidly through acquisition under Donal Geaney in the 1990s.
By 2001, the stock hit $65 on the back of a bullish outlook on approval for new drugs and forecasts of 30 per cent earnings growth. At the end of that year, the company was commencing phase III trials of Antegren for Multiple Sclerosis and Crohn's Disease.
A month later, in January 2002, the bottom fell out of the stock as it was forced to suspend trials of a treatment for Alzheimer's following reports of patients suffering brain inflammation.
It was to be the first of three disappointments in tests for drugs on which Elan was trying to build its future.
Worse was to come. Less that two weeks later, the Wall Street Journal published a stinging indictment of Elan's accounting policies. In the wake of the Enron debacle, nervous investors had little stomach for stocks with question marks over their accounting and Elan's share price continued its seeming inexorable decline.
Management led by Mr Geaney struggled to restore confidence. A month after announcing a poorly-received restructuring plan, the former KPMG partner was forced to step down as chairman and chief executive. With him went the group's chief financial officer, Tom Lynch.
Dr Garo Armen, a non-executive director, was put in charge at the head of a five-strong executive committee.
He began the radical restructuring of the company, selling non-core assets and rationalising a bewildering number of joint ventures to meet debts.
At the start of 2003, Merrill Lynch turnaround expert Kelly Martin was brought on board as chief executive.
He took the company rescue plan in hand while ensuring that sufficient resources were put behind the drugs seen as the future of the company, notably Tysabri (formerly called Antegren) as a treatment for MS, Crohn's and rheumatoid arthritis, painkiller Prialt and the Alzheimer's programme.
In May, the market was again blindsided as Elan failed to meet its targets in a trial of Antegren as a treatment for Crohn's. The shares lost a third of their value in one day.
Since then, the company has carefully managed expectations. By the end of 2003, the asset disposal programme was effectively complete and in May of this year, the company filed with the FDA for approval on Antegren as a treatment for MS.
The application was fast-tracked and approved within six months. At that time, last November, Elan seemed to have resurrected itself. Now it has to do it all over again.
