Elan Upgrade Lifts Spirits

Shares rise 4% after A.G. Edwards takes its rating on the stock to hold from sell.
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Irish drug company

Elan

(ELN)

was upgraded to hold from sell at A.G. Edwards, whose analysts believe that chances are the multiple sclerosis drug Tysabri will return to the market.

The product, which Elan markets with

Biogen Idec

(BIIB) - Get Report

, was pulled earlier this year after being linked to a serious and potentially fatal brain disease.

By factoring Tysabri back into Elan's results for next year, A.G. Edwards expects the company to lose 54 cents a share, compared with its previous estimate of 59 cents.

Assuming that by 2009 the drug has about 7% of the U.S. multiple sclerosis market and 6% of the European Union market, it would generate revenue of $1 billion, A.G. Edwards says.

"We believe this level of success for Tysabri is already factored into the

Elan share price, however, as the stock is volatile, we would not want to be selling the shares in the event Tysabri is allowed back on the market," the firm says in a research report dated Nov. 11.

Elan was trading up 35 cents, or 4%, to $9.20. Biogen was gaining 13 cents, or 0.3%, to $44.11.