on Thursday reported first-quarter results in which the loss was greater and the revenue was smaller than in the same period last year.

The big change was caused primarily by the Feb. 28 suspension of sales of Tysabri for multiple sclerosis. Elan and its partner

Biogen Idec

(BIIB) - Get Report

pulled Tysabri after reports of patients in clinical trials developing a rare, often fatal central nervous system disorder. The companies have confirmed three cases of this disease. Two patients have died.

Elan lost $115.6 million, or 29 cents a share, on revenue of $102.7 million for the three months ended March 31. For the same period last year, it lost $62.2 million, or 16 cents a share, on revenue of $148.3 million.

The consensus view of analysts polled by Thomson First Call was for a loss of $74.4 million, or 28 cents a share, on revenue of $127.9 million.

Elan's stock gained 33 cents, or 7.8%, to $4.58. Biogen Idec

released its first quarter results Wednesday after markets had closed. On Thursday, its stock was up 79 cents, or 2.2%, to $36.63.

If there's any optimism, it comes from comments by Biogen Idec executives Wednesday that they and Elan officials hope to complete by late summer their review of all clinical trial data involving Tysabri. Then they will talk to the Food and Drug Administration about the drug's return to the market. The Biogen Idec executives said they were optimistic, on the basis of Tysabri's strong efficacy, that the drug could be reinstated.

But that didn't cheer up Erica Whittaker of Merrill Lynch, who kept her sell rating on Elan on Thursday. "Without Tysabri as a blockbuster product, we remain concerned that without more severe restructuring, Elan will have difficulty repaying its $2-billion-plus debt obligations in 2008 and 2011," she said in a Thursday report to clients.

She predicts Tysabri could return to the market in early 2006 under tight restrictions that would limit to sales in peak years to $200 million to $350 million. She doesn't own shares; her firm has a non-investment-banking relationship and is a market maker in Elan's stock.

Tysabri's initial allure was not only analysts' belief that drug could produce well over $1 billion a year in treating MS but also that it held promise, based on early clinical trials, for treating the severe gastrointestinal ailment Crohn's disease and rheumatoid arthritis.

Although Biogen Idec has other big products to help it absorb the shock of losing Tysabri, Elan has a handful of small products, including Azactam, an antibiotic, which could lose patent protection in October.

"Our forecasts are under review," says Andrew Swanson of Citigroup Smith Barney in a report to clients Thursday. He is "unconvinced" that the review of patients' records by Elan and Biogen Idec will provide the answers the FDA wants in order to permit Tysabri's return to the market.

"Our forecast changes will not impact our investment thesis, which remains entirely dependent upon the potential return of Tysabri," says Swanson. Right now, he has excluded Tysabri from his earnings model, and he is keeping a sell rating. Swanson doesn't own shares; his firm is a market maker in Elan's stock.

"We remain focused on operating our business in a disciplined and rigorous way," said Kelly Martin, Elan's chief executive, in a prepared statement. The Tysabri setback means the company must "prudently manage costs" while providing enough support "to realize future opportunities."

After the review of Tysabri clinical test data is completed, "we will make further adjustments to our cost structure as appropriate," said Shane Cooke, the chief financial officer. The company has $1.35 billion in cash and no debt repayments due until 2008.