BioWorld International Correspondent

DUBLIN, Ireland - Looking to put the nightmare that was 2002 behind it, Elan Corp. plc turned to Wall Street in its search for a replacement for former chief Donal Geaney. The troubled biopharmaceutical firm named Merrill Lynch & Co. veteran G. Kelly Martin as president and CEO, while Garo Armen, who has served as chairman and head of an interim executive management committee since July, will continue to chair the company.

Martin is due to take up his new post Feb. 3.

"Weighing the balance at the moment, it's more positive than negative news for them," analyst Ian Hunter of Dublin-based Goodbody Stockbrokers told BioWorld International. "He's a well-known name on Wall Street and he's known for his ability to prune down businesses," he said. "The downside, of course, is he doesn't have any pharmaceutical industry experience."

Martin was formerly president of the international private client group at New York-based Merrill Lynch. He was a member of both the executive management and operating committees of the investment bank, which he joined in 1981 after graduating from Princeton University.

His immediate task will be to continue the asset divestiture program that is already under way and to prune back costs and gain operating efficiencies at Dublin-based Elan. In addition, the company faces important debt negotiations in 2004 and 2005 relating to its qualifying special purpose entities, EPIL II and EPIL III. These vehicles were designed to cover potential shortfalls in investments in public and private companies and represent a maximum potential liability of US$840 million.

The asset sale has already realized over US$600 million from a planned US$1.5 billion. "We're quite comfortable that they will hit their targets," Hunter said.

Elan's drug delivery business and its two remaining hospital infection products, Maxipime and Azactam, are likely to be next on the block, he said. "Our main concern is what is left," he added. At this point, the company would be a loss-making entity with large cash-hungry programs in Alzheimer's disease and autoimmune disease.

"The whole thing has become a play on Antegren," Hunter said, referring to the company's monoclonal antibody in Phase III clinical trials in both multiple sclerosis and Crohn's disease. The earliest stage at which that product will start to generate revenues would be 2005, he said, unless the FDA conducts an interim review of the clinical data before that.