Elan hammered by second death

SHARES in Irish drug company Elan were hammered again in Dublin yesterday as news of a second death linked to its multiple sclerosis drug, Tysabri, hit the market.

In Dublin shares in Elan, which developed the drug with its US partner Biogen Idec, suffered further losses and was down at €4.70 by late afternoon yesterday.

Tysabri has been on the market in the US since last November. It had been expected to get EU approval later this year.

Since Monday the shares have lost a total of €6.1 billion and moved from being the fourth largest company quoted on the Irish Stock Exchange to the tenth. That represents a collapse in the share price of 77% in the week.

Its market value has fallen from €7.9bn on Monday to less than €2bn yesterday as the erosion of the share price continued for the fifth successive day.

Elan opened on Monday at €20.30 and was being quoted last night in late trading at €4.70, representing actual loss of €15.60 in the share price in the space of five days.

In the meantime Biogen’s share price has been cut 44% to $37.95 in the week form $67.28 representing a loss of $9.8bn in the week or €7.5bn.

Stuart Draper of Dolmen Butler Briscoe said losses were phenomenal and has seriously undermined the status of the company on the Irish market.

For Elan and Biogen, facing a class action for alleged insider dealing in the US, the big issue for both companies at this stage is the growing doubts about the drug.

On the evidence to hand, Mr Draper said the time scale for getting Tysabri back on to the market could be several months.

But he said the big conundrum “is no longer if but when” the drug will be cleared for further use.

Analysts now reckon if it does get clearance it will be reduced to the drug of last resort.

That means it will be limited to use in sufferers where existing drugs have prove ineffective, analysts have said.

On their own Tysabri or Biogen’s MS drug Avonex are not a problem. Combined they have been linked to the disease of progressive multifocal leukoencephalopathy (PML), which in this instance has proved fatal in two cases.

Both companies were pinning their hopes on the combination of Biogen’s older established drug, Avonex, with Tysabri for the treatment of multiple sclerosis and other diseases including Crohn’s Disease and arthritis.

At one stage projected annual sales were as high as €4bn for the new drug, but analysts have cut that figure by up to 75% since Monday.

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