Elan surge on relaunch hope
Elan, which saw its shares plummet following the withdrawal of the Tysabri drug in February following the death of three patients treated with it, saw its shares rise by €1.10 to €5.30 in early trading on the Irish market. They eased later in the day to close at €4.73, a 13% overall rise.
Since Elan released first-quarter results last week, shares have jumped by around 50%, giving the company a market value of €1.6 billion.
It also emerged yesterday that chairman Kyran McLaughlin spent €361,000 buying 90,000 shares in the company.
Commenting on the share price rise in recent days, JP Morgan analyst Corey Davis said: “It’s been driven primarily by speculation of Tysabri coming back to market sometime in the next 12 to 18 months.
“This doesn’t seem to be driven by any new information, but more from a shift in sentiment.”
Elan and its American partner, Biogen Idec, withdrew Tysabri after two patients developed an illness called progressive multifocal leukoencephalopathy (PML). Another patient has since been identified.
The companies are now examining patient records to determine the relationship between the treatment and the disease.
The outcome of this investigation will help determine whether Tysabri can be sold again.
The first two patients developed the disease after taking Tysabri in combination with Biogen Idec’s older MS drug Avonex.
A third patient, who died in 2003, developed the disorder while taking Tysabri in a trial of the drug for use against the bowel disorder, Crohn’s disease.
Mr Davis said in a note to investors yesterday that the lack of any new confirmed cases of PML in users of Tysabri could be working in Elan’s favour.
Elan has pinned its future on sales of Tysabri and some analysts had expected the drug to contribute hundreds of millions a year in sales.
The company holds its annual general meeting on May 26 in Dublin’s Westin Hotel, with an update on Tysabri expected.
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