Good News for Tysabri

Medical advisers to the Food and Drug Administration say the multiple sclerosis drug Tysabri can also be used to treat Crohn's disease, a chronic gastrointestinal ailment.

The recommendation, issued late Tuesday afternoon, provides a boost to Biogen Idec(BIIB Quote) and Elan(ELN Quote), whose Crohn's disease application was recently rejected by the European Union.

The FDA advisers' vote, which came well after the market had closed, sent shares of Elan up 82 cents, or 4.4%, in after-hours trading. In regular trading, Elan's stock closed at $18.73, up 70 cents, or 3.9%, on heavier-than-average volume. Biogen Idec's stock rose $1.11, or 2%, to $56.64 in regular trading on heavy volume.

Although the FDA isn't required to follow its advisers' suggestions, it usually does so. The panelists voted 12-3 with two abstentions. Two committee members left before the final vote.

The drug was endorsed for people with moderate to severe Crohn's disease, on the condition that the companies implement a plan "with very strict post-marketing surveillance," the FDA said.

"The committee also required a strict risk-management program for Tysabri and for FDA to put clearly defined endpoints to protect patients, and to remove from the market if needed," the agency said.

The advisory committee's vote occurred days after an FDA staff report questioned Tysabri's effectiveness for treating Crohn's disease. The report, issued Friday, said Tysabri "isn't distinguished" from current Crohn's disease treatments.

EU health regulators had argued that the drug's benefits didn't outweigh its risks, adding that there was "insufficient evidence" that Tysabri helped Crohn's disease patients. The companies will appeal. The EU approves Tysabri for MS patients.

Tysabri was cleared in the U.S. in November 2004, then withdrawn in February 2005 after Biogen Idec and Elan learned it could be linked to a rare, often fatal brain infection called progressive multifocal leukoencephalopathy, or PML.

EU regulators cited the PML risk a reason for rejecting Tysabri for Crohn's disease. The FDA approved the return of Tysabri in June 2006 as an MS treatment. Tysabri has been available for 12 months, but with many restrictions.