Tysabri review could return suspended Elan drug to market

Elan shares rose 3.22 per cent following the news yesterday that a US committee is to review the company's suspended multiple sclerosis drug Tysabri.

The decision of the review committee will have a major impact on the future of Elan and its partner Biogen Idec.

Analysts predicted that the review would pave the way for the return of the drug to the market but warned that worries in the meantime could lead to a share price fall.

Tysabri was withdrawn last February after a fatal case of the rare brain and spinal-chord infection progressive multifocal leukoencephalopathy (PML) occured to one of the clinical trial patients. Two further cases of PML later emerged.

If the product is approved for sale again, it is likely to come with an amended label that will highlight the issue of PML. The drug is seen as key to restoring Elan's fortunes after a brush with bankruptcy in 2002.

The committee is part of the Food and Drug Administration (FDA) in the US.

It has stated that it will announce its finding on Tysabri by March 26th at the latest. Elan is expected to announce its full-year results on January 31st.

Davy, which acts as broker to Elan, said that in the nine months to end September 2005, the market for the four major MS drugs available was worth at least $3.7 billion (€3 milion).

It said revenues for the first nine months of 2005 were up 15.5 per cent.

NCB said that "while we would expect this panel [the committee] to recommend to the FDA the relaunch of Tysabri, the risk of negative commentary ahead of the panel's decision could generate negative sentiment and weak share price performance".

The broker said that a relaunch of Tysabri "is expected to coincide with the publication of the revised label, which will highlight the two cases of PML in patients on combination therapy and the risk of PML should a patient be immunosuppressed, along with further data from the two-year phase III clinical studies. We continue to believe that the FDA will approve the relaunch of Tysabi as a treatment option for MS patients by the end of March 2006."

In September of last year Elan and Biogen submitted to the FDA a supplemental licence application which was granted priority review status. Priority review is granted to products that address and unmet medical need and are considered to offer potentially significant therapeutic advancements over existing therapies, according to Elan.

It said the application included two-year data from the phase III trial, a revised label and a risk management plan, as well as an integrated safety assessment of Tysabri clinical trial patients.

Elan and Biogen "also recently completed a comprehensive safety evalution of more than 3,000 Tysabri patients in collaboration with leading experts in PML and MS," Elan said. "The results yielded no new confirmed cases of PML beyond the three previously reported."

Elan closed 44 cents higher at $14.10 in New York last night.