"Cash flow positive!" -- three little words that are music to biotech investors' ears.
I'm not sure if investors are quite as excited about "adjusted EBIDTA positive." It just doesn't have the same ring to it. Not to mention that earnings before interest, depreciation, taxes, and appreciation doesn't mean nearly as much as seeing the greenbacks in the bank account.
For now, though, that's all Elan's
Elan is basically a one-trick pony at this point. Its share of Tysabri sales, which Elan splits with Biogen Idec
At that point, it'll basically be Tysabri and the pipeline of Alzheimer's drugs. While the potential for both is huge, Elan is going to have to operate flawlessly on Tysabri to convince patients that the benefits from taking the drug outweigh the risk.
For the Alzheimer's drugs, the company just needs to get lucky. The disease has taken down many a drug -- Eli Lilly's
Elan is headed in the right direction, but investors should be cautious here. Elan needs more than a little cash flow to justify the $3 billion market cap.
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