July has been a busy month for biopharma Elan (NYSE:ELN). Last week the drugmaker announced its second-quarter results and the FDA indicated which way it was leaning on its marketing application to expand the label for lead drug Tysabri.  

As Elan's marketing partner Biogen Idec (NASDAQ:BIIB) announced earlier last week, sales of Tysabri were $72 million in the second quarter and 14,000 patients were taking the drug worldwide as of July.

In the conference call Elan guided for 20,000 patients worldwide to be taking Tysabri as a treatment for multiple sclerosis by the end of the year. At the drug's wholesale price of $28,400 in the U.S. (it is similarly priced in the rest of the world), this would put the annualized run-rate on sales of Tysabri at nearly $570 million.

Even with this increasing Tysabri sales growth, Elan won't become earnings positive next year. It has to ramp up spending on its Alzheimer's disease drug candidate, AAB-001, which is set to begin phase 3 studies by the end of the year. In addition, Elan's two antibiotic products will have their sales kneecapped as generic competition starts up.

Elan experienced a setback with Tysabri last week when European Union medical authorities rejected the drug's use as a treatment for Crohn's disease. On Thursday the FDA released its briefing document ahead of an advisory panel meeting set for Tuesday to debate expanding the drug's use for this indication in the U.S. The advisory panel's recommendations aren't binding but are a very strong indication of how the FDA will rule on a drug; in my opinion, it looks like the FDA is leaning toward a negative recommendation.

The good news is that Tysabri will finally start generating profits for Elan sometime in the third quarter as the drugmaker has almost reached the 15,000 patients taking the drug that is needed to offset the $300 million a year in expenses for marketing the compound.

Any bet on Elan is primarily a bet on the outcomes of Tysabri and AAB-001. For valuation reasons I wouldn't touch shares of Elan at this $9 billion market capitalization level, but at least the drugmaker is making some progress with its two lead compounds.

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.