Elan shares soar on drug review
The drug, Tysabri, was withdrawn from the market in February after two patients who took the treatment with another drug had died of the brain disease PML. A third patient developed PML, but survived.
After a review of patients who had been taking Tysabri, no further cases of PML have been detected. Elan added that a safety evaluation in using Tysabri for treating Crohn’s Disease and rheumatoid arthritis is on track to be completed by the end of the summer. Elan and US firm Biogen Idec - which is developing Tysabri with the Irish firm, said almost 2,000 patients who were taking Tysabri underwent the safety evaluation and they were encouraged by the findings.
“The findings announced today are an important milestone in understanding the appropriate benefit-risk profile for Tysabri.
“Patient safety remains our top priority. We are committed to finalising the safety evaluation for Crohn’s Disease and rheumatoid arthritis, which is progressing well and on track to be completed by the end of the summer. We look forward to working with regulatory authorities to determine the path forward for Tysabri,” Elan said in a statement.
The news sent Elan’s shares €1.20 higher on the Dublin market to €7.30. Since Tysabri was withdrawn, the shares have lost two-third of their value.
Elan has pinned its survival on the success of the drug. Athlone-based Elan has been forced to sell off much of its other assets after an accounting scandal in 2002 which caused a cash crisis. Ian Hunter, an analyst at Goodbody Stockbrokers, said the update from the company increased his confidence that Tysabri will be available again by next year.
“This progress report and the move to initiate further trials gives us increased confidence that, given its undoubted efficacy, Tysabri will make it back onto the market for the treatment of MS.
“The companies anticipate making submissions to the (US Food and Drug Administration) in early Autumn. Although the timing of FDA and/or advisory committee reviews remains unquantifiable, we believe today’s announcement is an important step in the return of Tysabri by early 2006,” Mr Hunter said.
International analysts were slightly more cautious on the prospect of Tysabri securing Elan’s future. Merrill Lynch’s Erica Whittaker said in a research note that she believes Tysabri will return to the market in early 2006, but only in a limited clinical setting, restricted to MS patients with no other treatment options.
She expects peak global sales of less than $500 million (€404m), which would make it tough for Elan to repay its roughly $2 billion in debt due in 2008 and 2011.
Ms Whittaker said Tysabri would have to generate peak sales of more than $1.2bn for Elan to make its debt repayments. She maintains a “sell” rating on Elan.
