Elan shares slumped again yesterday as the company confirmed that a second Tysabri patient had contracted a generally fatal disease. Dominic Coyle reports.
The company and its partner, Biogen, admitted that the second patient was suffering from progressive multi focal leukoencephalopathy (PML), the same condition found in a trial patient who has died. The company added that there had been no reports of PML in patients receiving Tysabri on its own as a treatment for Multiple Sclerosis or in patients with Crohn's Disease or rheumatoid arthritis.
NCB analyst David Marshall said the confirmation of the second case of PML was a blow to the early return to the market of Tysabri.
Shares in Elan fell almost 25 per cent in Dublin to €4.25 at one point and opened 14 per cent lower in New York on $5.75.
Sentiment was exacerbated by an incorrect report from news agency Associated Press (AP), which stated that the second patient had died.
A correction by AP shortly before the Dublin market closed helped the stock recover some ground to close on €4.80.
Sentiment was also bolstered slightly by Wellington Management, which announced that it had bought some shares for the first time since Monday's crash. Wellington had been the largest single shareholder in Elan until the end of last week when it reduced its holding.
Executives from Elan and Biogen held their first meeting with medical experts in PML and representatives of the regulator, the Food and Drug Administration, yesterday. The panel hopes to understand how MS patients contract PML and explain the role, if any, of dosing patients with a combination of Tysabri and Biogen's Avonex in triggering the disease.
The Elan spokeswoman said there would be no announcement after the meeting but reiterated that the company's goal was to "bring Tysabri back to the market".
"We want to act quickly but thoroughly," she said.
Davy, whose clients are thought to have been particularly hard hit by the collapse in Elan's share price, said continued negative publicity had the potential to have a further impact on the share price "especially in any newsflow vacuum that will exist until investigations and patient evaluations are complete".
It also emerged yesterday that the Securities and Exchange Commission had contacted Elan and Biogen over the sudden collapse of the price. A spokeswoman for Elan said the SEC inquiries were "not related to trading in the company's stock". "This is simply a routine inquiry from the SEC which normally occurs where there has been a major movement in a stock price," she said.
