Elan Corporation (ELN)

Revenue from divested products

During 2004, Elan sold a number of products and businesses as part of its recovery plan and the subsequent strategic repositioning of Elan as a biotechnology company. Revenue from divested products and businesses was $0.4 million in the second quarter of 2005, compared to $17.7 million in the same quarter of 2004, principally consisting of Zonegran. In the second quarter of 2005, Elan recorded $20.0 million in contingent consideration associated with the sale of Zonegran to Eisai Co. Ltd. (Eisai). The contingent consideration, which was recorded as a gain on the divestment of businesses (see page 11), was included in prepaid and other current assets on the consolidated balance sheet at June 30, 2005 and was received in July 2005.

(B) Revenue from Divested Products

In June 2003, we completed the sale of our primary care franchise, principally our rights to Skelaxin and Sonata, to King. We did not report any product revenue from sales by us of Skelaxin and Sonata during 2004 (2003: $108.4 million). Following divestment, we earn royalties on sales of Skelaxin by King. This amounted to $12.2 million in 2004 (2003: $7.4 million).

In December 2003, we announced the completion of the sale of the Pain Portfolio to aaiPharma. Product revenue from the Pain Portfolio was $Nil for 2004 (2003: $68.0 million).

In February 2004, we completed the sale of our European sales and marketing business to Zeneus. Product revenue for the divested European business was $10.9 million for 2004 (2003: $112.4 million).

In April 2004, we sold our interests in Zonegran in North America and Europe to Eisai. Zonegran generated product revenue of $41.2 million for 2004 (2003: $80.7 million).

In May 2004, we terminated our development and licence agreements with Vernalis regarding Frova. Vernalis purchased our commercialisation rights in North America for $55.0 million. At closing, we terminated our co-promotion agreement with UCB for approximately $10.0 million. Frova generated product revenue of $10.3 million for 2004 (2003: $37.5 million).