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Brain Infections Sink Elan, Biogen

Biogen Idec (BIIB) and Elan (ELN) sank hard and fast in post-market trading Thursday, after a regulatory filing confirmed two cases of an often deadly brain infection in multiple sclerosis (MS) patients treated with Tysabri.

The cases are the first confirmed since approval of the drug in the European Union and the re-entry of the drug into the U.S. market two years ago. Tysabri was previously removed from the market after being linked to progressive multifocal leukoencephalopathy (PML), but has since been relaunched with a warning on the label.

Elan shares, already battered earlier in the week following the presentation of mixed data on its experimental Alzheimer's drug bapineuzumab, were tumbling $8.45, or 42.1%, to $11.60 in after-hours trading. Biogen shares were sinking $14.26, or 20.4%, to $55.50.

According to the 8-K filing, the cases were both in MS patients in the EU who were treated in the commercial (or nonclinical trial) setting. The patients were on the drug for 17 months and 14 months, respectively. Currently one patient is clinically stable and ambulatory at home and the other is hospitalized.

Reports of a suspected case on an Adverse Event Reporting System (AERS) database surfaced in recent weeks, sparking investor concern. But fears were temporarily allayed last week when the company said on its earnings call that there have still been no confirmed cases including assessment of that case.

"We've said in the past, and the FDA has also said, as is clearly stated in our label that we've anticipated seeing additional cases of PML," Biogen Idec spokeswoman Naomi Aoki said Thursday night. The label currently indicates that the expected rate is 1 occurrence in 1,000 patients, which was calculated at the time of the drug's reintroduction to the market.

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