Irish drugmaker Elan posted a fourth-quarter operating loss of $31 million today, but said it hopes for a change in fortunes in 2006 as it remains optimistic of a return to market of Tysabri for psoriasis.

On the plus side, the fourth-quarter operating result was well down on the $98 million loss posted in the same period of 2004, and even in the absence of Tysabri (natalizumab), product revenue grew 40% to $140 million.

A year ago, Elan’s losses were linked to its major investment in the launch of Tysabri, along with partner Biogen Idec, having received approval for the drug in the USA in November. But the two companies were forced to withdraw the drug after it was linked to the development of a rare central nervous system disease in some patients.

Now, Tysabri’s chances of returning to market hinge on a US Food and Drug Administration (FDA) advisory committee meeting on March 7.

“We are well positioned to re-market Tysabri, and the progress we have made in improving our operating leverage will accelerate our return to profitability” said Shane Cook, Elan’s chief financial officer. The company said it has earmarked $150-$170 million to invest in R&D and general expenses relating to this product in 2006, "based on the potential re-marketing of Tysabri in the USA in the second quarter of 2006 and the potential launch of Tysabri in Europe in the second half of 2006."

But there were encouraging signs amongst other areas of the business as well. Elan’s contract manufacturing and development activities and royalties added $59 million in the fourth quarter, a 45% increase year-on-year, while top product Maxipime (cefepime hydrochloride) rose 57% to $47 million.

For the full-year, Elan trimmed its losses to $198 million from $302 million, while revenues were up marginally to $490 million. It expects 2006 revenues to be around $500 million.