Elan shares gain on positive Tysabri news

SHARES IN Irish drug developer Elan jumped yesterday following reassuring comments from the US Food and Drug Administration (FDA) and an update at a conference in Madrid on the latest cases of a generally fatal brain disease.

The shares added almost €1 in Dublin trade to close at €10.22, having hit €10.30 earlier in the session.

The bulk of the yesterday's gains were attributable to the FDA announcement, which saw Elan gain almost $1 in late US trade on Monday. Elan has now recovered from a €7.08 low in Dublin earlier this month.

The FDA announced that it was working with the manufacturers to amend the product labelling to inform prescribers and patients that cases of progressive multifocal leukoencephalopathy (PML) had occurred in patients taking Tysabri on its own as monotherapy. But it said it "still believes that Tysabri monotherapy may confer a lower risk of PML than when Tysabri is used together with other immunomodulatory medications".

PML is a generally fatal brain disease which was recently diagnosed in two multiple sclerosis patients taking Tysabri.

The comments were seen as generally supportive of the drug. The FDA, Elan and Biogen had stated when the drug returned to the market in 2006 that further cases of PML were likely to emerge. But the fact that the latest cases occurred in people taking no other MS treatment had caused alarm.

Most analysts said yesterday they would need to wait for the next set of Tysabri patient figures, due next month, before assessing the prospects for the drug.

"Given that it has been known for the past month that PML has occurred in patients taking Tysabri as a monotherapy, this amendment to Tysabri's label is not expected to further alter physicians' prescribing behaviour significantly," NCB Stockbrokers analyst Páraic Quinn wrote in a note to clients.

Addressing a meeting of the European Federation of Neurological Societies in Madrid yesterday, Dr Ralf Gold gave an update on the most recent PML cases and the safety of Tysabri.

He said one of the two patients was being treated as an outpatient and was clinically stable; the other was hospitalised and was stable although "cognition" had improved.