Top two quit in Elan shake-up

12 April 2012

THE top two executives at Elan have quit as part of a shake-up to revive investor confidence in the ailing Irish drugs group. The company, hit by concerns over its accounting and a profit warning earlier this year, is also slashing costs and selling assets.

Chairman and chief executive Donal Geaney has resigned -just hours before he was expected to address investors about the firm's financial position. His deputy Thomas Lynch is also going. The two will advise new chairman, Antigenic's chief Garo Armen, until a replacement chief executive is found.

The group, also listed in New York, said it had more than $1.3bn (£900m) in cash - enough to implement its salvage plan. It has potential debts of $4.5bn.

The shares have fallen from nearly £44 last year to 102 1/2p amid accounting concerns. The stock nosedived last week when the publication of its 2001 accounts raised fresh questions about its methods and left investors fearing a cash crunch. Elan conceded that it had sold royalty rights for some products and faced higher debts then feared.

Armen, an Elan director since 1994, is being joined by a group of current non-executive directors stepping up to executive roles at the company. Previously, Geaney and Lynch were the only two executive directors on the board.

A new executive committee includes Bank of Ireland chairman Laurence Crowley; JP Morgan Funds trustee Ann Maynard Gray; Kyran McLaughlin, former head of equities and corporate finance at Ireland's Davy Stockbrokers; and Daniel Tully, former chairman and chief executive of Merrill Lynch, vice chairman of the New York Stock Exchange, vice chairman of the American Stock Exchange and Chairman of the Board of Governors of the National Association of Securities Dealers.

'It's a prestigious group they've assembled, they obviously want to show the market they're cleaning up their act,' said one analyst. 'But you have to ask, as they were already on the board, why didn't they do something about this earlier?'

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