Alzheimer's Club

"Elan director and world renowned authority on Alzheimer's disease, Dennis Selkoe MD, sold 2,800 Elan shares for $120,000 indicating a price of $43.65 in "early December 2001" the company has stated to The Sunday Business Post.

This was shortly before the pharmaceutical company announced poor results from its major Alzheimer's tests on January 18, 2002. The share price subsequently collapsed to a recent price of around $2.

Selkoe also sold 20,000 shares for just over $1 million on February 6, 2001. Elan directors' sales, in all, came to over $43.5 million in February 2001. Selkoe had indicated that he would sell 8,303 Elan shares, worth $364,623 on December 10, 2001 but the company only has records of the smaller sale. Selkoe appears to have been the only director to sell shares last December. He also gave 232 shares to charity in December and January.

The company also said that Selkoe continues to own 163,000 shares. "We have a detailed securities trading policy which requires directors and other senior management to pre-clear sales with the chairman and our legal advisors," according to company secretary, Liam Daniels. Under this system, Selkoe "did receive approval to sell in February 2001 and again last December," he added.

Selkoe joined the board of Elan in 1996 following Elan's acquisition of Athena, where he had been a director and co-founder. He is a professor of neurology and neuroscience at Harvard Medical School and is also a co-director of the Centre for Neurologic Disease at the Brigham and Women's Hospital.

Daniels, said the first indication of adverse events with the Alzheimer's drug tests "were in early January 2001. Obviously, we did detailed assessments because safety was a major concern. This concern arose during the tests," he said. Daniels describes Selkoe as the "scientific founder of Athena Neurosciences" but he was not involved in the day to day aspects of the tests. The tests were being done in various locations by Elan and its partner, Wyeth.

Elan's shares were in the mid-$40 range on January 18, when it publicly announced difficulties with its Alzheimer's drug. It was only after this event that the company's other weaknesses were given attention by the press. The shares had already dropped to about $15 in early February as a result of test problems, when the Wall Street Journal's hammering of its accounting policies and the subsequent investigation by the SEC sent the shares even lower. They slid to below $2 in recent months.

Selkoe and Athena figured in a WSJ article in 1998 which reported that one of Athena's tests for Alzheimer's had been declared superior to rivals' tests by an expert panel convened by the National Institute of Health. Sales of the test rose immediately by 28 per cent. "Some Alzheimer's researchers are crying foul. Five of the panel's eight members had financial or research ties to Athena, a San Francisco, California, unit of Ireland's Elan Corp plc. The panel's "consensus report," in the journal Neurobiology of Aging, doesn't disclose these relationships. Some medical ethicists consider this a glaring omission," the WSJ said.

Selkoe, one of the Elan-connected people on the panel, told the WSJ that in retrospect, his affiliation should have been declared in the report. He also said that during the workshop he informed panel chairman Dr John Growdon about those ties..."

Source: Des Crowley. Elan Alzheimer's expert in pre-slump share sale. (18 August 2002) [FullText]