Updated from 11:40 a.m. EST

Biogen Idec

(BIIB) - Get Report

needs to regroup and recrunch the numbers.

The biotech company has withdrawn financial guidance for 2005 since uncovering a third case of a rare, often fatal disease linked to a patient who had used its multiple sclerosis drug Tysabri. Analysts expected EPS of $1.60 on revenue of $2.4 billion. In February, the company forecast EPS, excluding one-time items, of $1.60 to the low $1.70s.

Shares in Biogen Idec and

Elan

(ELN)

were first pounded in late February when the companies pulled Tysabri from the market after receiving reports of one death linked to a patient who had taken the drug during clinical trials. A second case of the rare disease was confirmed later. Both patients took Tysabri for more than 24 months in conjunction with Avonex, an MS drug made by Biogen Idec.

Shares were slammed again on Thursday after a third PML case was reported in a man who took part in a trial for the use of Tysabri in treating Crohn's disease, the inflammatory bowel disease linked to immune system abnormalities. PML, or progressive multifocal leukoencephalopathy, is an often fatal central nervous system disease. In this third case, the patient had not received a combination treatment with Avonex, suggesting Tysabri was the culprit.

Before the Crohn's disease trial, though, the third patient's prior medication history included more than six years of sustained immunosuppressant use, which overlapped the Crohn's disease trial, the company said Friday during a presentation at Lehman Brothers' global health care conference, at which it provided new information on the third case as well as its research plans.

The man was initially diagnosed with brain cancer in July 2003 and died that December. Though the patient had symptoms consistent with a brain tumor, a review of the patient's MRI showed that a brain lesion caused by PML was mistaken for a tumor.

PML is related to the JC virus, a common asymptomatic virus that often lies dormant in the bodies of 80% of the population, according to Biogen Idec. In people with lowered immune functions, such as people with AIDS and or on immunosuppressant drugs, the virus can be reactivated, leading to the fatal disease PML.

Last November, the FDA granted the company accelerated approval for Tysabri to treat MS relapses, on the basis of yearlong phase III clinical trial results showing the drug was safe and effective.

In its annual report filed Thursday, Biogen Idec said the companies "are working with clinical investigators to evaluate patients treated with Tysabri in clinical studies and are consulting with leading experts to better understand the possible risk of PML. The outcome of these evaluations will be used to determine possible reinitiation of dosing in clinical studies and future commercial availability."

The company will evaluate thousands of patients and expects to announce the results in the second half of the year, said Biogen Idec executive chairman Bill Rastetter.

Each patient will have and MRI, which should detect any abnormalities in brain tissue. Based on these results and those of a physical assessment, patients may undergo a lumbar puncture, also known as a spinal tap, to extract cerebrospinal fluid allowing for a definitive diagnosis.

Biogen Idec shares were down 3 cents, or 0.1%, to $34.48, and Elan shares were up 14 cents, or 4.3%, to $3.38.