Elan Reports First Quarter 2009 Financial Results

DUBLIN--(Business Wire)--
Elan Corporation, plc, today reported its first quarter 2009 financial results,
highlighted by a 14% increase in revenue to $245.1 million and Adjusted EBITDA
losses reduced by 59% to $6.0 million, compared to the first quarter of 2008,
and significant advances in the company`s Biopharmaceuticals business.

Elan CEO Kelly Martin said that the company continued advancing its science
toward patients, with particular focus on multiple sclerosis, Alzheimer`s
disease and Parkinson`s disease. Mr. Martin noted that specific progress in the
quarter included the continued growth of Tysabri and the advancement of Elan`s
Alzheimer`s clinical portfolio.

Commenting on the company`s previously announced strategic review process, Mr.
Martin said, "This process is continuing and we remain committed to exploring
and objectively assessing all available options that balance the short-,
intermediate- and long-term opportunities. We will communicate our progress at
the appropriate time."

Elan executive vice president and chief financial officer Shane Cooke said that
the company was pleased with the solid start to the year, noting that Tysabri
continues to grow and, with a number of new initiatives, Elan is confident it
will see a reacceleration to a stronger growth trend. The improvement in Elan`s
operating performance was offset by the inclusion of other net charges
associated with the adjustments mainly to the Biopharmaceuticals business
announced in February 2009, non-cash tax charges associated with the U.S.
business, partially offset by a gain on a legal settlement. As a result, the net
loss increased to $102.6 million.

Mr. Cooke added, "For the full year 2009, we remain on target to record double
digit revenue growth and to be profitable on an Adjusted EBITDA basis." Mr.
Cooke also emphasized that the goal of Elan`s strategic review was to secure
access to financial resources and commercial infrastructure that would enable
the company to accelerate the development and commercialization of its extensive
pipeline and product portfolio, while maximizing the ability of Elan`s
shareholders to participate in the resulting long-term value creation.

Unaudited Consolidated Income Statement Data
Three Months Ended

March 31
2008 2009
US$m US$m
Revenue (see page 7)
Product revenue 207.3 242.9
Contract revenue 7.4 2.2
Total revenue 214.7 245.1
Cost of goods sold 110.8 128.8
Gross margin 103.9 116.3

Operating Expenses (see page 12)
Selling, general and administrative 74.0 71.0
Research and development 72.5 80.5
Other net charges 3.0 19.6
Total operating expenses 149.5 171.1
Operating loss (45.6) (54.8)

Net Interest and Investment Losses (see page 13)
Net interest expense 34.5 33.8
Net investment losses 3.3 -
Net interest and investment losses 37.8 33.8

Net loss before tax (83.4) (88.6)
Provision for income taxes 2.1 14.0
Net loss (85.5) (102.6)

Basic and diluted loss per ordinary share (0.18) (0.22)
Basic and diluted weighted average number of ordinary shares 471.6 475.4
outstanding
(in millions)

Unaudited Non-GAAP Financial Information - EBITDA

Non-GAAP Financial Information Three Months Ended
Reconciliation Schedule March 31
2008 2009
US$m US$m

Net loss (85.5) (102.6)
Net interest expense 34.5 33.8
Provision for income taxes 2.1 14.0
Depreciation and amortization 17.0 19.1
Amortized fees (1.2) (0.1)
EBITDA (33.1) (35.8)

Non-GAAP Financial Information Three Months Ended
Reconciliation Schedule March 31
2008 2009
US$m US$m
EBITDA (33.1) (35.8)
Share-based compensation 12.2 10.2
Other net charges 3.0 19.6
Net investment losses 3.3 -
Adjusted EBITDA (14.6) (6.0)

To supplement its consolidated financial statements presented on a U.S. GAAP
basis, Elan provides readers with EBITDA (Earnings Before Interest, Taxes,
Depreciation and Amortization) and Adjusted EBITDA, non-GAAP measures of
operating results. EBITDA is defined as net income or loss plus or minus
depreciation and amortization of costs and revenues, provisions for income tax
and net interest expense. Adjusted EBITDA is defined as EBITDA plus or minus
share-based compensation, other net charges, and net investment gains or
losses.EBITDA and Adjusted EBITDA are not presented as, and should not be
considered alternative measures of, operating results or cash flows from
operations, as determined in accordance with U.S. GAAP. Elan`s management uses
EBITDA and Adjusted EBITDA to evaluate the operating performance of Elan and its
business and these measures are among the factors considered as a basis for
Elan`s planning and forecasting for future periods. Elan believes EBITDA and
Adjusted EBITDA are measures of performance used by some investors, equity
analysts and others to make informed investment decisions. EBITDA and Adjusted
EBITDA are used as analytical indicators of income generated to service debt and
to fund capital expenditures. EBITDA and Adjusted EBITDA do not give effect to
cash used for interest payments related to debt service requirements and do not
reflect funds available for investment in the business of Elan or for other
discretionary purposes. EBITDA and Adjusted EBITDA, as defined by Elan and
presented in this press release, may not be comparable to similarly titled
measures reported by other companies. Reconciliations of EBITDA and Adjusted
EBITDA to net loss from continuing operations are set out in the tables above
titled, "Non-GAAP Financial Information Reconciliation Schedule."

Unaudited Consolidated U.S. GAAP Balance Sheet Data

December 31 March 31

2008 2009

US$m
US$m
Assets
Current Assets
Cash and cash equivalents 375.3 290.2
Restricted cash and cash equivalents - current 20.2 20.3
Investment securities - current 30.5 23.2
Deferred tax assets - current 95.9 88.1
Prepaid and other current assets 240.1 241.1
Total current assets 762.0 662.9

Non-Current Assets
Intangible assets, net 553.9 544.1
Property, plant and equipment, net 351.8 337.2
Investment securities - non-current 8.1 8.5
Deferred tax assets - non-current 145.3 140.1
Restricted cash and cash equivalents - non-current 15.0 14.8
Other assets 31.5 30.2
Total Assets 1,867.6 1,737.8

Liabilities and Shareholders` Deficit
Accounts payable, accrued and other liabilities 334.8 295.9
Long-term debt 1,765.0 1,765.0
Shareholders` deficit(1) (see page 13) (232.2) (323.1)
Total Liabilities and Shareholders` Deficit 1,867.6 1,737.8

(1)Elan`s debt covenants do not require it to maintain or adhere to any specific
financial ratios.Consequently, the shareholders` deficit has no impact on Elan`s
ability to comply with its debt covenants.

Unaudited Consolidated U.S. GAAP Cash Flow Data

Three Months Ended
March 31
2008 2009
US$m US$m

Net interest and tax (36.4) (36.6)
Other net charges (3.0) (1.7)
Other operating activities (14.6) (6.0)
Working capital (increase)/decrease (12.5) 18.0
Cash flows used in operating activities (66.5) (26.3)

Net purchases of tangible and intangible assets (8.4) (68.8)
Net proceeds from sale of investments 184.4 7.6
Net proceeds from product divestment 2.0 -
Cash flows from financing activities 14.7 2.2
Restricted cash and cash equivalents movement (0.8) 0.2
Net cash movement 125.4 (85.1)
Beginning cash balance 423.5 375.3
Cash and cash equivalents at end of period 548.9 290.2

Overview

Operating Results

For the first quarter of 2009, total revenue increased by 14% to $245.1 million,
from $214.7 million for the same period in 2008. Revenue from the
Biopharmaceuticals business grew by 28% while revenue from the Elan Drug
Technologies (EDT) business decreased by 14%. The increase in revenue from the
Biopharmaceuticals business was driven by a strong performance from Tysabri®,
more than offsetting reduced sales of Azactam® and Maxipime®. Elan`s recorded
sales of Tysabri increased 48% to $158.7 million for the first quarter of 2009,
from $107.0 million for the first quarter of 2008, consistent with the 42%
growth in global in-market net sales of Tysabri to $227.5 million in the first
quarter of 2009. The decrease in revenue from the EDT business was principally
due to timing differences of milestone payments earned and customer orders.

For the first quarter of 2009, the gross margin was $116.3 million, compared to
$103.9 million for the first quarter of 2008. The increased gross margin was
driven by significantly higher sales of Tysabri, which more than offset the loss
of gross margin as a result of reduced sales of Azactam, Maxipime and revenues
from EDT.

The operating loss before other net charges for the first quarter of 2009 was
$35.2 million, a decrease of 17% from $42.6 million for the first quarter of
2008. This improved operating performance was driven by the 14% increase in
revenue and the resulting increase in the gross margins. Selling, general and
administrative (SG&A) expenses declined by 4% while research and development
(R&D) costs increased by 11%.

For the first quarter of 2009, the net loss before tax was $88.6 million,
compared to $83.4 million for the first quarter of 2008. This increase was
primarily due to higher other net charges and R&D expenses, partially offset by
the 14% increase in revenues and lower net investment losses. The increase in
other net charges primarily relates to severance and restructuring charges of
$22.2 million and non-cash asset impairment charges of $15.4 million, partially
offset by a legal settlement gain of $18.0 million related to Elan`s Naprelan®
product. These charges relate to the previously announced postponement of Elan`s
biologics manufacturing activities, a strategic redesign and realignment of the
R&D organization within Elan`s Biopharmaceuticals business, and reduction of
related G&A and other support activities.

The provision for income taxes was $14.0 million in the first quarter of 2009,
compared to $2.1 million in the first quarter of 2008. This follows the
recognition of a net deferred tax asset of $236.6 million in the fourth quarter
of 2008 related to Elan`s U.S. tax loss carryforwards, due to the recent and
projected future profitability of Elan's U.S. operations. The tax charge for the
quarter includes a non-cash amortization expense related to that asset as the
underlying loss carryforwards are utilized to shelter taxable income in the
United States. Elan expects its tax expense in future periods to include similar
non-cash amortization expenses.

Adjusted EBITDA

For the first quarter of 2009, Adjusted EBITDA losses were $6.0 million, a
decrease of 59% compared to Adjusted EBITDA losses of $14.6 million for the same
period of 2008. The improvement principally reflects the 14% increase in revenue
and improved operating margins.

A reconciliation of Adjusted EBITDA to net loss, is presented in the table
titled, "Unaudited Non-GAAP Financial Information - EBITDA," included on page 3.
Included at Appendix I is a further analysis of the results and Adjusted EBITDA
between the Biopharmaceuticals and EDT businesses.

Total Revenue

For the first quarter of 2009, total revenue increased 14% to $245.1 million
from $214.7 million for the same period of 2008, primarily driven by the strong
growth of Tysabri. Revenue from the Biopharmaceuticals business increased by 28%
while revenue from the EDT business decreased by 14%. Revenue is analyzed below
between revenue from the Biopharmaceuticals and EDT business units.

Three Months Ended
March 31
2008 2009
US$m US$m
Revenue from the Biopharmaceuticals business 145.3 185.4
Revenue from the EDT business 69.4 59.7
Total revenue 214.7 245.1

Revenue from the Biopharmaceuticals business

For the first quarter of 2009, revenue from the Biopharmaceuticals business
increased by 28% to $185.4 million from $145.3 million for the first quarter of
2008. The increase was primarily driven by strong growth in Tysabri sales, which
more than compensated for reduced sales of Azactam and Maxipime.

Three Months Ended
March 31
2008 2009
US$m US$m

Tysabri - U.S. 86.3 116.0
Tysabri - Rest of world (ROW) 20.7 42.7
Total Tysabri 107.0 158.7
Azactam 24.2 17.2
Maxipime 10.1 5.0
Prialt® 3.8 4.1
Royalties 0.2 0.4
Total revenue from Biopharmaceuticals business 145.3 185.4

Tysabri

Global in-market net sales of Tysabri can be analyzed as follows:

Three Months Ended
March 31
2008 2009
US$m US$m
United States 86.3 116.0
ROW 73.4 111.5
Total Tysabri in-market net sales 159.7 227.5

For the first quarter of 2009, Tysabri in-market net sales increased by 42% to
$227.5 million from $159.7 million for the same period of 2008. The increase
reflects strong patient demand across global markets. At the end of March 2009,
approximately 40,000 patients were on therapy worldwide, including approximately
20,800 commercial patients in the United States and approximately 18,500
commercial patients in the ROW, representing an increase of 6% over the
approximately 37,600 patients who were on therapy at the end of December 2008.

Cumulatively, in the post-marketing setting approximately 52,000 patients have
been treated with Tysabri as of the end of March 2009. Of those patients,
approximately 24,900 have received at least one year of Tysabri therapy,
approximately 14,400 patients have received at least 18 months of Tysabri
therapy, and 6,800 patients have received at least 24 months of Tysabri therapy.
In the post marketing setting, there have been six confirmed cases of
progressive multifocal leukoencephalopathy (PML) in Tysabri-treated MS patients.

Tysabri was developed and is being marketed in collaboration with Biogen Idec
Inc. (Biogen Idec). In general, subject to certain limitations imposed by the
parties, Elan shares with Biogen Idec most of the development and
commercialization costs for Tysabri. Biogen Idec is responsible for
manufacturing the product. In the United States, Elan purchases Tysabri from
Biogen Idec and is responsible for distribution. Consequently, Elan records as
revenue the net sales of Tysabri in the U.S. market. Elan purchases product from
Biogen Idec at a price that includes the cost of manufacturing, plus Biogen
Idec`s gross margin on Tysabri, and this cost, together with royalties payable
to other third parties, is included in cost of sales.

Outside of the United States, Biogen Idec is responsible for distribution and
Elan records as revenue its share of the profit or loss on these sales of
Tysabri, plus Elan`s directly-incurred expenses on these sales.

As a result of the continuing strong growth in Tysabri sales, in January 2009,
Elan made an optional payment of $50.0 million to Biogen Idec in order to
maintain an approximate 50% share of Tysabri for annual global in-market net
sales of Tysabri that are in excess of $1.1 billion. This payment has been
capitalized as an intangible asset and is being amortized on a straight-line
basis over approximately 11 years. There are no further milestone payments
required for Elan to retain its approximate 50% profit share.

Tysabri - U.S.

In the U.S. market, Elan recorded net sales of $116.0 million for the first
quarter of 2009, an increase of 34% over net sales of $86.3 million in the same
period of 2008. Almost all of these sales are for the MS indication.

At the end of March 2009, approximately 20,800 patients were on commercial
therapy, which represents an increase of 3% over the approximately 20,200 since
the end of December 2008 and 36% since the end of March last year.

Tysabri - ROW

In the ROW market, Biogen Idec is responsible for distribution and Elan records
as revenue its share of the profit or loss on ROW sales of Tysabri, plus Elan`s
directly-incurred expenses on these sales. As a result, in the ROW market, Elan
recorded net revenue of $42.7 million for the first quarter of 2009, compared to
$20.7 million for the first quarter of 2008, an increase of 106%. Elan`s net
Tysabri ROW revenue is calculated as follows:

Three Months Ended
March 31
2008 2009
US$m US$m
ROW in-market sales by Biogen Idec 73.4 111.5
ROW operating expenses incurred by the collaboration (54.4) (58.9)
ROW operating profit generated by the collaboration 19.0 52.6
Elan`s 50% share of Tysabri ROW collaboration operating profit 9.5 26.3
Elan`s directly incurred costs 11.2 16.4
Net Tysabri ROW revenue 20.7 42.7

At the end of March 2009, approximately 18,500 patients, principally in the
European Union (EU), were on commercial therapy, an increase of 9% over the
approximately 16,900 who were on therapy at the end of December 2008 and 81%
over the end of March last year.

Other Biopharmaceuticals products

Azactam revenue decreased 29% to $17.2 million for the first quarter of 2009,
compared to $24.2 million for the same period of 2008. The decrease was
principally due to supply shortages, which are expected to be resolved by
mid-year. Azactam lost its patent exclusivity in October 2005 and its future
sales are expected to be negatively impacted by generic competition. However, no
generic form of Azactam has been approved to date.

Maxipime revenue decreased 50% to $5.0 million for the first quarter of 2009
from $10.1 million for the first quarter of 2008. The decrease was principally
due to generic competition. The first generic cefepime hydrochloride was
launched in June 2007, and additional generic forms of Maxipime have since been
launched.

Prialt revenue was $4.1 million for the first quarter of 2009, compared to $3.8
million for the same period of 2008, an increase of 8%. The increase was
primarily due to higher demand for the product.

Revenue from the EDT business

For the first quarter of 2009, revenue from the EDT business decreased by 14% to
$59.7 million from $69.4 million for the first quarter of 2008.

Three Months Ended
March 31
2008 2009
US$m US$m
Product revenue
Manufacturing revenue and royalties
Tricor® 13.0 13.6
Focalin XR® / Ritalin LA® 8.3 8.4
Verelan® 5.8 5.9
Skelaxin® 6.5 5.3
Other 28.4 24.3
Total manufacturing revenue and royalties 62.0 57.5

Contract revenue
Amortized fees 1.1 -
Research revenue and milestones 6.3 2.2
Total contract revenue 7.4 2.2

Total revenue from the EDT business 69.4 59.7

Manufacturing revenue and royalties comprise revenue earned from products
manufactured for clients and royalties earned principally on sales by clients of
products that incorporate Elan`s technologies. Except as noted above, no other
product accounted for more than 10% of total manufacturing revenue and royalties
for the first quarter of 2009 or 2008. For the first quarter of 2009, of the
total of $57.5 million (2008: $62.0 million) in manufacturing revenue and
royalties, 43% (2008: 42%) consisted of royalties received on products that were
not manufactured by Elan.

An additional analysis of the results between the Biopharmaceuticals and EDT
businesses are set out in Appendix I. For the first quarter of 2009, Adjusted
EBITDA from the EDT business decreased by $4.1 million to $20.7 million from
$24.8 million for the same period of 2008. The first quarter of 2008 benefitted
from milestones associated with the approval of Luvox CR® and Zanaflex®
achieving $105 million in cumulative sales. EDT revenues, and their impact on
Adjusted EBITDA, vary from quarter to quarter based on a number of factors
including the timing of customer orders and contractual in-market sales hurdles
for royalties.

Potential generic competitors have challenged the existing patent protection for
several of the products from which Elan earns manufacturing revenue and
royalties. Elan and its clients defend the parties` intellectual property rights
vigorously. However, if these challenges are successful, Elan`s manufacturing
revenue and royalties will be materially and adversely affected.

Operating Expenses

Selling, general and administrative

Although revenues increased by 14% in the first quarter of 2009, SG&A expenses
decreased by 4% to $71.0 million from $74.0 million for the same period of 2008.
The decrease principally reflects reduced litigation expenses, along with
continued cost control. SG&A expense for the three months ended March 31, 2009
and 2008 can be analyzed as follows:

Three Months Ended
March 31
2008 2009
US$m US$m
Biopharmaceuticals 52.1 53.5
EDT 11.1 7.9
Depreciation and amortization 3.9 4.1
Share-based compensation 6.9 5.5
Total 74.0 71.0

The SG&A expenses related to the Tysabri ROW sales are reflected in the Tysabri
ROW revenue as previously described on page 9.

Research and development

For the first quarter of 2009, R&D expenses increased 11% to $80.5 million from
$72.5 million for the same period of 2008. The increase was primarily due to
increased expenses associated with the progression of Elan`s Alzheimer`s disease
programs, including the Phase 3 clinical trials of bapineuzumab.

Other net charges

Other net charges for the three months ended March 31, 2009 and 2008 were as
follows:

Three Months Ended
March 31
2008 2009
US$m US$m
Severance and restructuring charges 3.0 22.2
Asset impairment charges - 15.4
Legal settlement gain - (18.0)
Total 3.0 19.6

For the first quarter of 2009, other net charges of $19.6 million primarily
consist of severance and restructuring charges of $22.2 million and non-cash
asset impairment charges of $15.4 million, partially offset by a legal
settlement gain of $18.0 million. The severance and restructuring charges and
asset impairment charges were principally associated with the postponement of
Elan`s biologics manufacturing activities, the strategic redesign and
realignment of the R&D organization within Elan`s Biopharmaceuticals business,
and reduction of related support activities. These adjustments resulted in a
reduction in Elan`s global workforce of approximately 230 positions, or 14% of
its total workforce.

The legal settlement gain of $18.0 million relates to an agreement with Watson
Pharmaceuticals, Inc. (Watson) to settle litigation with respect to Watson`s
marketing of a generic version of Naprelan. As part of the settlement, Watson
stipulated that Elan`s patent at issue is valid and enforceable and that
Watson`s generic formulations of Naprelan infringed Elan`s patent. In connection
with the settlement, Elan received $18.0 million from Watson in March 2009.

Net interest and investment losses

For the first quarter of 2009, net interest and investment losses decreased to
$33.8 million from $37.8 million for the first quarter of 2008. This decrease
was primarily due to net investment losses of $3.3 million in the first quarter
of 2008, mainly related to investment impairments.

Movement in Shareholders` Deficit

US$m
Balance at December 31, 2008 (232.2)
Net loss for the period (102.6)
Share-based compensation 11.9
Issuance of share capital 0.7
Other (0.9)
Balance at March 31, 2009 (323.1)

Elan`s debt covenants do not require it to maintain or adhere to any specific
financial ratios. Consequently, the shareholders` deficit has no impact on
Elan`s ability to comply with its debt covenants.

Research and Development Update

During the course of 2009, Elan`s goal is to continue its progress throughout
its R&D programs, including Alzheimer`s disease, Parkinson`s disease, MS and
other neurodegenerative areas.

Alzheimer`s disease and other neurodegenerative diseases

Elan is focused on further enhancing its breakthrough basic and clinical
research in Alzheimer`s disease. With bapineuzumab (AAB-001, a monoclonal
antibody targeted against beta amyloid peptide), Elan and

Wyeth have discontinued the highest of three doses, 2.0 mg/kg, in the two
ongoing Phase 3 studies in patients with mild to moderate Alzheimer`s disease
who do not carry the Apolipoprotein E4 (ApoE4) allele (non-carriers). ApoE4 is a
known genetic risk factor for development of Alzheimer`s disease. The decision
was made in concurrence with the study`s independent Safety Monitoring
Committee, following its review of vasogenic edema in the ongoing Phase 3
clinical program. The 0.5 mg/kg and 1.0 mg/kg doses in these two trials will
continue as planned. Enrollment in these two trials is ongoing.

A paper published in Current Alzheimer`s Research, 2009, Vol. 6 No. 2 indicates
that 4.6 years after immunization with AN 1792 (synthetic amyloid-Beta peptide),
a sub-group of patients defined as antibody responders in the Phase 2a study,
had evidence of low but detectable, sustained anti-AN1792 antibody titers.
[AN1792 Study was discontinued in 2002 when 6% of patients developed
meningoencephalitis] These patients demonstrated significantly reduced
functional decline compared to patients who had received placebo during the
initial phase of the study. Though this long-term follow-up data is limited and
must be assessed cautiously, we believe that the data support the hypothesis
that ABeta immunotherapy has the potential for long-term functional benefits.

On February 9, 2009, Elan and Biogen Idec announced the publication of new
efficacy data on Tysabri in the March 2009 issue of The Lancet Neurology.
Results of a retrospective analysis of data from the Phase 3 AFFIRM trial
indicate that five-times as many multiple sclerosis patients taking Tysabri were
free from disease activity versus placebo in the overall patient population.
Results showed that two years after beginning treatment with Tysabri, 37 % of
patients remained free of disease activity (as defined by absence of relapses,
new MRI lesions or disability progression), compared to 7% of placebo-treated
patients.

About Elan

Elan Corporation, plc (NYSE: ELN) is a neuroscience-based biotechnology company
committed to making a difference in the lives of patients and their families by
dedicating itself to bringing innovations in science to fill significant unmet
medical needs that continue to exist around the world. Elan shares trade on the
New York, London and Dublin Stock Exchanges. For additional information about
the company, please visit http://www.elan.com.

Forward-Looking Statements

This document contains forward-looking statements about Elan`s financial
condition, results of operations, business prospects and products in research
and development that involve substantial risks and uncertainties.You can
identify these statements by the fact that they use words such as "anticipate",
"estimate", "project", "target", "intend", "plan", "will", "believe", "expect"
and other words and terms of similar meaning in connection with any discussion
of future operating or financial performance or events.Among the factors that
could cause actual results to differ materially from those described or
projected herein are the following: the potential of Tysabri, the incidence of
serious adverse events associated with Tysabri (including any additional cases
of PML), and the potential for the successful development and commercialization
of additional products; the potential of Elan`s other marketed products; Elan`s
ability to maintain sufficient cash, liquid resources, and investments and other
assets capable of being monetized to meet its liquidity requirements; the
success of research and development activities including, in particular, whether
the Phase 3 clinical trials for bapineuzumab are successful and the speed with
which regulatory authorizations and product launches may be achieved; whether we
will be able to enter into or consummate a definitive transaction as the result
of our evaluation of strategic alternatives and our ability to maximize
shareholder value through that process or any resulting transaction; whether the
proposed acquisition of Wyeth by Pfizer Inc. will adversely affect our
collaboration with Wyeth; competitive developments affecting Elan`s products
(including, in particular, when Azactam will face generic competition); the
ability to successfully market both new and existing products; difficulties or
delays in manufacturing and supply of Elan`s products; trade buying patterns;
the impact of generic and branded competition, whether restrictive covenants in
Elan`s debt obligations will adversely affect Elan; the trend towards managed
care and health care cost containment, including Medicare and Medicaid; the
potential impact of the Medicare Prescription Drug, Improvement and
Modernization Act 2003; possible legislation affecting pharmaceutical pricing
and reimbursement, both domestically and internationally; failure to comply with
kickback and false claims laws including in respect to past practices related to
the marketing of Zonegran® which are being investigated by the U.S. Department
of Justice and the U.S. Department of Health and Human Services (the resolution
of this Zonegran matter could require Elan to pay substantial fines and to take
other actions that could have a material adverse effect on Elan); failure to
comply with Elan`s payment obligations under Medicaid and other governmental
programs; exposure to product liability and other types of lawsuits and legal
defense costs and the risks of adverse decisions or settlements related to
product liability, patent protection, securities class actions, governmental
investigations and other legal proceedings; Elan`s ability to protect its
patents and other intellectual property; claims and concerns that may arise
regarding the safety or efficacy of Elan`s products or product candidates;
interest rate and foreign currency exchange rate fluctuations; governmental laws
and regulations affecting domestic and foreign operations, including tax
obligations; general changes in United States and International generally
accepted accounting principles; growth in costs and expenses; changes in product
mix; and the impact of acquisitions, divestitures, restructurings, product
withdrawals and other unusual items. A further list and description of these
risks, uncertainties and other matters can be found in Elan`s Annual Report on
Form 20-F for the fiscal year ended December 31, 2008, and in its Reports of
Foreign Issuer on Form 6-K filed with the U.S. Securities and Exchange
Commission.Elan assumes no obligation to update any forward-looking statements,
whether as a result of new information, future events or otherwise.

Appendix I

Three Months Ended Three Months Ended
March 31, 2008 March 31, 2009
Biopharma- EDT Total Biopharma- EDT Total

ceuticals
ceuticals
US$m US$m US$m US$m US$m US$m
Revenue
145.3 62.0 207.3 Product revenue 185.4 57.5 242.9
- 7.4 7.4 Contract revenue - 2.2 2.2
145.3 69.4 214.7 Total revenue 185.4 59.7 245.1
78.7 32.1 110.8 Cost of goods sold 100.3 28.5 128.8
66.6 37.3 103.9 Gross margin 85.1 31.2 116.3

Operating Expenses
62.1 11.9 74.0 Selling, general and administrative(1) 61.9 9.1 71.0
60.6 11.9 72.5 Research and development 68.5 12.0 80.5
3.0 - 3.0 Other net charges 19.6 - 19.6
125.7 23.8 149.5 Total operating expenses 150.0 21.1 171.1
(59.1) 13.5 (45.6) Operating (loss)/income (64.9) 10.1 (54.8)

7.3 9.7 17.0 Depreciation and amortization 10.5 8.6 19.1
- (1.2) (1.2) Amortized fees - (0.1) (0.1)
9.4 2.8 12.2 Share-based compensation 8.1 2.1 10.2
3.0 - 3.0 Other net charges 19.6 - 19.6
(39.4) 24.8 (14.6) Adjusted EBITDA (26.7) 20.7 (6.0)

(1) General and corporate costs have been allocated between the two segments.

Elan Corporation, plc
Investor Relations:
Chris Burns, 800-252-3526
David Marshall, 353-1-709-4444
or
Media Relations:
Mary Stutts, 650-794-4403
Jonathan Birt, 212-850-5664 or 44-20-7269-7205
Niamh Lyons, 353-1-663-3602

Copyright Business Wire 2009