Updated from 5:58 p.m. EDTBiogen Idec ( BIIB) confirmed late Wednesday that a third patient taking its multiple sclerosis drug Tysabri developed the dangerous brain infection progressive multifocal leukoencephalopathy. New cases of PML in Tysabri patients were widely expected and remain in line with the label. However, shares of Biogen and partner Elan ( ELN) continued to decline Thursday, losing 6.3% and 12.4%, respectively. Investors reacted similarly to earlier cases. Biogen reported in an 8-K filing with the Securities and Exchange Commission that regulatory agencies were notified Wednesday of the new confirmed case of the condition in a patient with multiple sclerosis. The drug was removed from the market in 2005 after being linked to PML, which can be deadly, but it has since been relaunched with information about the PML risk on its label. The new patient was a female in the U.S., according to Biogen spokeswoman Naomi Aoki. The patient is under the care of her treating physician, and she was confirmed to have the infection after 14 injections of Tysabri. In late July, Biogen and Elan disclosed the first two confirmed cases of PML since the drug's relaunch, sending both stocks into a tailspin. Both of those patients have shown signs of improvement, said Aoki, noting that heightened clinical vigilance and risk-management programs have been key to early detection. One of the patients remains hospitalized. The Food and Drug Administration has since expanded Tysabri's warning label to include the risk of the infection with the drug when it is used alone. "PML remains a rare adverse event in Tysabri patients, and the rate seen is consistent with what you'd expect to see based on the cases discussed in the label," Aoki said. The label currently indicates that the expected rate is one occurrence in 1,000 patients, which was calculated at the time of the drug's reintroduction to the market. "We do not believe this changes the risk profile of the drug, where three cases of 18,000 commercial patients on therapy for over one year (1 in 6,000) still looks much better than the label at one in 1,000," wrote JPMorgan analyst Geoff Meacham in. "Hence, we see a very low probability Tysabri will be pulled from the market, and we doubt this will have a material impact on new patient adds beyond the adds seen in 3Q. "We continue to believe that clinical vigilance allowing for early identification and treatment for PML could improve the risk profile for Tysabri, as PML could become a manageable side effect," wrote Meacham, who reiterated an overweight rating for Biogen.