Elan shares plunged 68 per cent today after one patient died following treatment with the company's Tysabri drug in combination with Biogen Idec's multiple sclerosis drug Avonex. Elan shares fell €13.92 to €6.38 on the Irish stock exchange this afternoon.
Biogen Idec and Elan suspended sales of their new multiple sclerosis drug Tysabri. The company has also suspended dosing in all clinical trials of the drug.
Elan and Biogen said there was one fatal, confirmed case and one suspected case of progressive multifocal leukoencephalopathy, a rare and frequently fatal disease of the central nervous system.
Tysabri, which was approved last November, was widely expected to become the world's leading multiple sclerosis treatment and the driving force behind a revitalisation of Elan and a new growth spurt for Biogen Idec, whose existing multiple sclerosis drug, Avonex, faces increased competition.
The patients cited by the companies were taking both Tysabri and Avonex. Biogen Idec had hoped patients would get an extra benefit by taking both drugs.
"We are working with leading experts and regulatory agencies to responsibly investigate these events and to develop the appropriate path forward," said Mr Lars Ekman, executive vice president and president, research and development, with Elan. "Our primary concern is for the safety of patients."
The companies said about 3,000 patients have been treated with Tysabri in trials of MS, Crohn's disease and rheumatoid arthritis.
Elan said it is likely to make adjustments to its 2005 forecasts within the next 10 days. "It is an exceptional step where a company suspends the commercial distribution of a drug based on one case," said Dr Ekman.
The sales suspension caused Deutsche Bank Equity Research analyst Ms Jennifer Chao to cut her rating on Biogen Idec to "sell" from "buy" based on the loss of sales and lack of clarity in the mid-term.
But Elan investors felt the bigger blow. "The largest blow is, of course, for Elan, as they came back sharply on Tysabri after all the setbacks in recent years," said Mr Bob Pooler, an analyst at Swiss brokerage Lombard Odier Darier Hentsch.
Additional reporting by