Elan, Biogen shares rise on drug trials

ELAN and Biogen share prices rose immediately yesterday on the back of positive results in trials of their Antegren drug in patients with multiple sclerosis and Crohn's disease.

In Dublin, Elan rose more than 24% by early afternoon to 2.55 and it was trading at $2.87 on the NYSE, up around 16.6%. On the Nasdaq, Biogen was up around 2.25% to $40.96 in early trading.

Elan's positive bounce was also partly due to its announcement earlier this week that it had completed the sale of its subsidiary Athena Diagnostics to Behrman Capital for

$82 million (78 million).

Elan chairman Dr Garo Armen said the sale brought the cash raised through its asset divestiture program to approximately $680m.

"In the five months since the announcement of our recovery plan, we have accomplished nearly 45% of the stated target of

$1.5bn to be achieved by the end of 2003.

"Based on the execution of our recovery plan to date, I am confident that we will reach our divestiture targets ahead of schedule. Discussions on other asset divestitures and business rationalisations are ongoing."

Peter Frawley, analyst with Merrion Stockbrokers in Dublin, said the disposals announced to date and upbeat comments from Elan's management on the disposal programme gave Merrion confidence that the risk of a short-term liquidity crisis is receding.

"However, significant risks remain, particularly in the area of the outstanding SEC/class action lawsuits and success with its late stage pipeline," Mr Frawley said.

Ronan Wallace of Dolmen placed a hold recommendation on Elan, with a similar warning about the SEC investigation into the company.

He said there was a "good level of progress" on the asset disposal programme, but that much remained to be done.

The latest clinical studies published in the New England Journal of Medicine yesterday showed higher rates of remission in Crohn's patients taking natalizumab (Antegren) than in those on a placebo.

Biogen and Elan are collaborating on the development, manufacturing and marketing of the drug, which was developed at Elan's facility in San Francisco.

The Phase II study of 248 patients with Crohn's, an intestinal condition, also found that they all showed improvements in quality of life.

A separate study on the effects of the drug on patients with MS found it reduced new inflammatory brain lesions by 93% and clinical relapses by 50% in patients with the relapsing forms of the condition.

The study provides independent verification of trial results announced by Elan late last year.

Four phase III trials to further evaluate the safety and efficacy of natalizumab in both MS and Crohn's are currently underway.

One of the two studies into Crohn's is the largest ever of its kind, with more than 850 patients enrolled.

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