Amid reports of a 10% cut in its workforce, Elan Corp has been boosted by a positive report from broker Jefferies & Co.

Iniating coverage on the Irish drugmaker with a 'buy' rating, analyst Corey Davis has issued a research note saying that the company's current business should become profitable in 2011 "without heroic assumptions". He believes that the multiple sclerosis blockbuster Tysabri (natalizumab), partnered with Biogen Idec, will continue to sell well, despite the arrival of Novartis new oral MS drug Gilenya (fingolimod).

Mr Davis is also enthusiastic about the prospects for the investigational Alzheimer's treatment bapineuzumab, discovered by Elan and now being developed by Johnson & Johnson and Pfizer. He believes the drug has a 65% chance for approval and "tremendous upside with little downside" since the market is not so confident. Bapineuzumab "has the potential to transform the treatment of one of the most elusive pharmaceutical targets, but it will require investor patience," the analyst concluded.

Meantime, Reuters has reported that Elan Corp has laid off 130 people, or about 10% of its workforce. Most of the cuts have taken place at its R&D facility in San Francisco. and half of the posts were held by scientists.

The news agency says it received an email from Elan confirming the cuts. The Dublin-headquartered company stated that "in a highly competitive market where resources are limited, we have a responsibility to continually evaluate our programmes so that we remain efficient".

The email to Reuters concludes that Elan has a "multiyear objective to become a profitable, sustainable and self-funding biotechnology company by the end of 2011 - a goal we are well on target to achieve".