Shares in Elan surged by more than 14 per cent to $2.81 in New York yesterday following publication of positive findings about one of its key drugs, Antegren, in a US medical journal.

In Dublin, the shares gained nearly 27 per cent to €2.60 after a clinical study in the New England Journal of Medicine (NEJM) found Antegren cut the development of brain lesions and reduced relapses in patients with multiple sclerosis. Another study in the same journal also showed promising results for Antegren in patients with Crohn's disease.

Analysts said much of the information in the study had already been presented by Elan and Biogen, its partner in developing the drug, at medical conferences in recent months. But they noted that the journal's findings provided strong independent evaluation of the data.

"The NEJM data bears out the strong preliminary data presented over the last 12 months," said Mr Jack Gorman, analyst at Davy Stockbrokers. He said the focus was now on the performance of the drug in Phase III trials, with the first Crohn's study expected to be completed by the end of this year.

The two companies expect to have the first results from final studies of the drug by late 2003 or early 2004. It also emerged yesterday that the US Food and Drug Administration (FDA) had agreed to consider an interim review of the multiple sclerosis data and possibly approve Antegren for limited use if the study is positive.

According to Goodbody Stockbrokers, this could have the drug on the market in late 2004, a year earlier than currently predicted.

Antegren is a key part of Elan's pipeline as the company struggles to pay off its debt and get back on a sound financial footing.

One US broker estimated the drug could have $850 million (€813 million) in annual sales.