Here's something we haven't seen in awhile: Elan (NYSE: ELN) posted its first annual operating profit, excluding one-time charges, since 2001. In the interim, the company lost more than $1.4 billion, and that only includes the loss from operations; there was an additional $700 million or so in losses from interest charges.

In fact, the debt is still with Elan. The $118 million in interest expenses this year continues to be a significant drag on the company.

Still, there's no doubt Elan's operations and balance sheet have never been healthier in the past decade. Growth in sales of Tysabri, which it sells with Biogen Idec (Nasdaq: BIIB), is slowing down but still increased 18% in 2010. The company also managed to decrease its operating expenses by 9%.

Fortunately, Elan doesn't plan to wait another 10 years to show an operating profit. The company expects that revenue will continue to increase and expenses will be moderately lower in 2011. Add it all up, and Elan should be cash flow positive this year.

Valuing unprofitable drugmakers can be tricky, but with an enterprise value of $4.8 billion, Elan looks fairly cheap compared with its peers. Dendreon (Nasdaq: DNDN) has a market cap of $5 billion, and it won't bring in as much revenue this year as Elan, although Provenge has a steeper growth curve than Tysabri. On a price-to-sales ratio, Elan also looks cheaper than Onyx Pharmaceuticals (Nasdaq: ONXX) if you assign half of Bayer's Nexavar sales to Onyx.

As I see it, investors are basically getting Elan's pipeline for free. Part of the reason for the discount is the time it'll take to bring its next drug to market. Elan only has one drug in phase 3 development: Alzheimer's disease drug bapineuzumab, which is partnered with Johnson & Johnson (NYSE: JNJ) and Pfizer (NYSE: PFE). And the bapineuzumab trials won't read out for more than a year, so investors have quite a wait.

Elan could be a good bet at these levels, but there doesn't seem to be any immediate reason to rush in and buy shares.

Elan is a Motley Fool Rule Breakers recommendation. Find out why the Fool's analysts picked the stock and get their latest opinion on the company by grabbing a 30-day free trial to the newsletter.

Pfizer is a Motley Fool Inside Value pick. Johnson & Johnson is a Motley Fool Income Investor choice. Motley Fool Options has recommended a diagonal call position on Johnson & Johnson. The Fool owns shares of Johnson & Johnson. Motley Fool Alpha owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.