ELAN is facing problems with one of its most important second-line drugs, the chronic pain-killer Prialt, which is posting weaker than expected sales. Uptake of the drug among physicians in America, the drug’s key market, has been slow because they are having to wait up to seven months for reimbursement from health insurers and government schemes.

While the company is sticking to its peak sales target of $150m-$250m (€124m- €207m) within three to five years for the drug — which was launched in the US in January following approval from the US Federal Drug Administration late last year — it has only posted revenues of $4.3m for the nine months of the year.

The treatment received marketing approval from the European Commission in February of this year.

“Most analysts had been forecasting full-year sales of $15m at the beginning of this year. I’m now at $7m,” said Richard Parkes, a London-based analyst with ING. “If it does not pick up by the middle of next year, that’s when you’d start to get worried.”

Prialt had been gearing up to be a key sales-generating drug for the group. Elan and development partner Biogen expect the potential blockbuster multiple sclerosis drug, Tysabri, to be reintroduced to the market following its withdrawal last February on safety concerns.

Azactam, an Elan antibiotic drug which posted sales of $50.6m last year, is expected to come up against generic competition by the end of the year after its patent expired this month, while Maxipime, another antiobiotic and Elan’s current top-selling drug with sales last year of $117.5m, sees its patent expire in 2008.

While NCB Stockbrokers analyst Orla Hartford said she is prepared to wait another few quarters before taking a red pen to her estimates for the drug, Goodbody Stockbrokers analyst Ian Hunter cut his 2007 sales forecast for Prialt from $53m to $7.3m late last week.

Hunter has also lowered his earnings per share forecast for Elan for the same year to $0.07 from $0.09.

“Physicians are having to pay for the drug and wait six to seven months before they are reimbursed. They are used to waiting a month or two,” he said.

Robert Brisbourne, an analyst at Merrion Capital, said: “The slow take-up brings into question the peak sales forecast on my model of $140m.”

Elan told analysts last week that it has changed members of the drug’s market team, which Davy Stockbrokers analyst Jack Gorman wrote in a note to clients indicates “internal dissatisfaction with product performance”.

Elan is unperturbed by the weak sales performance of the drug to date. “Prialt is the first innovation in this area for many years. Unlike morphine, it is non-addictive and we’re engaged in a process of educating the market about its benefits. Doctors and physicians who have been using it are reporting very good experiences.”

Meanwhile, Elan said last week that its net losses for the third quarter had fallen by 38% from the year-earlier period to $67.1m as sales surged 40% year-on-year to $118.4m and as the group tightened up its control on costs.

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