The announcement from Elan that sales of its drug Tysabri have been suspended promptly wiped 70 per cent off the company's stock market value within a matter of hours and the decline continued yesterday, albeit to a much lesser extent.
While the employees and shareholders will be understandably disappointed, the greater tragedy, however, is the dashing of considerable expectations among multiple sclerosis sufferers.
The extent to which Tysabri brought new hope to those sufferers cannot be overstated. Multiple sclerosis, more commonly referred to as MS, is a chronic neurological condition which attacks the brain and spinal cord by destroying the sheaths that cover nerve fibres, resulting in damage to the fibres themselves. Since its launch in the US last November, approximately 3,000 people have been treated with Tysabri in clinical trials and a recent study showed that it slowed disability by 42 per cent, making it the most powerful treatment on the market.
The tragic death of a patient just three months after Tysabri was given approval by the US Food and Drug Administration calls into question its decision to fast-track the drug for approval. The accelerated approval status, which cleared the drug with just one year of clinical trial instead of the customary two, is usually reserved for only the most promising drugs. EU approval was expected later this year.
The chief executive of Elan, Kelly Martin, has rightly described the decision to suspend sales of the drug as a "cautious, prudent and patient-focused step". Elan and its joint venture partner, Biogen Idec, will now carry out tests on the 3,000 patients and if these do not manifest any damaging revelations, there is a possibility that Tysabri will be back on the market by the autumn.That scenario is one that the employees will be earnestly hoping for. Elan without Tysabri would be a much reduced operation.
Even if the drug comes back on the market soon, Elan's share price may take somewhat longer to recover. The shareholders in recent years have been on a roller-coaster ride typical of companies who embark on high- risk operations. People with pension plans may have been alarmed to find that part of their funds are invested in Elan.
Irish pension funds, however, tend to invest nearly one-fifth of their funds in the Irish stock market and as Elan is such a big player in that market, it stands to reason that they would have shareholdings in it. For everybody's sake, but particularly the MS patients, it must be hoped that Tysabri can be comprehensively confirmed as safe for treatment and returned soon to the market.