After restructuring, Elan focuses on its R&D priorities

For years Elan has struggled to deliver for its investors--with little success. It spent quite some time talking about restructuring without actually accomplishing much. It had to deal with a severe safety issue with Tysabri, its drug for multiple sclerosis. And its stock has suffered so badly that using a private jet for executive trips earned catcalls from analysts and shareholders alike. Back in 2008, The Street's Adam Feuerstein named CEO Kelly Martin the worst chief executive in biotech.

Now Martin is planning to step down after focusing the company on a narrow set of research goals. The delivery tech side of the business was finally bought out by a savvy group at Alkermes and Elan is focused on building its Tysabri franchise, depending on its revenue from sales to fund some new drugs in the pipeline while it scouts for fresh partnerships. 

Bloomberg's "Exhibit A" in the pipeline: Bapineuzumab, the Alzheimer's drug being advanced by J&J ($JNJ) and Pfizer ($PFE). Elan still has rights to some of the revenue from the treatment, a late-stage program angling to become the first new Alzheimer's med to get approved since 2004. Alzheimer's remains one of the most complex unmet medical needs in the business. Any new drug that can warrant an approval could earn a sizeable amount from a huge patient population. In this case some analysts are looking at mega-blockbuster returns, but Alzheimer's remains a wild card in the drug development business, as Pfizer learned with its big upfront deal for the disappointing Medivation drug Dimebon. And Elan learned long ago that over-promising on this Alzheimer's program has a big down side.

"You can buy Elan stock right now and still grab the upside of Tysabri, with bapineuzumab being the lottery ticket," Jefferies' Corey Davis tells the business news service.

In an interview with Bloomberg, Elan's CEO also highlighted early-stage for ELND002, its next-gen successor to Tysabri that is fully owned by Elan. And Martin made it clear that his $20 million development deal with Proteostasis is a model for future pacts.

- here's the story from Bloomberg