Another Setback for Tysabri

"This new report is consistent with our long-held thesis that the discovery of additional PML cases is highly likely, and there is a low probability of Tysabri returning to the market," says Adam A. Walsh, of Jefferies & Co., in a Thursday report to clients.

Even if the FDA allowed Tysabri back on the market, the drug would be subject to severe restrictions and would be allowed only for patients for whom all other treatments had failed, he adds. Walsh has a hold rating on Biogen Idec. He doesn't own shares, but his firm is a market maker in Biogen Idec's stock.

"Given the relative scarcity of PML in the general population, each new case significantly increases the likelihood that Tysabri use is directly linked to PML," says Andrew Swanson, of Citigroup Smith Barney, in a Thursday research note reiterating his sell rating on Elan. "Given the undefined risk, we exclude Tysabri from our [earnings] model." He doesn't own shares, and his firm is a market maker in Elan's stock.

Tysabri is approved for relapsing-remitting MS, the most common form of the disease at the time of diagnosis. It is characterized by acute symptoms or a worsening of neurological functions that can occur intermittently. These symptoms can weaken or disappear for months or years between relapses.

The drug reached the U.S. market in November. Not only did clinical trials show that Tysabri was effective in treating MS, but the companies also were encouraged that the drug might be useful in treating other inflammatory diseases such as the gastrointestinal disorder Crohn's disease and rheumatoid arthritis. The companies stopped clinical trials for all diseases once they pulled Tysabri from the MS market.

The first two cases of PML were detected in patients who had taken Tysabri plus Avonex for more than 24 months, suggesting that the combination of drugs or the length of treatment might have played roles in the dangerous side effect. The companies confirmed the death of one of those patients.

But the third person diagnosed with PML took only Tysabri for less than 18 months as part of a clinical trial for Crohn's disease. This patient, who died, also took drugs that suppress the body's immune system. These drugs are often prescribed for people with inflammatory diseases. This patient was initially diagnosed as having had a form of brain cancer.

According to The Boston Globe, the suspected fourth patient took Tysabri and Avonex for MS. The report didn't say how long the patient took the drugs.

>To order reprints of this article, click here: Reprints