Biogen Idec ( BIIB - Get Report) reported Friday that a tenth multiple sclerosis patient being treated with Tysabri was diagnosed with a serious brain infection.

The latest case of progressive multifocal leukoencephalopathy (PML) occurred outside the U.S. in a patient on Tysabri therapy for 30 months. Four Tysabri patients on therapy for more than 30 months have now contracted PML, including the last three reported cases.

This is raising concerns that the risk of a multiple sclerosis patient contracting PML increases with longer duration of Tysabri therapy. The overall incident rate of PML is still very small and Biogen Idec has presented scientific data disputing the notion that PML risk increases with longer Tysabri use.

However, some doctors are beginning to cycle patients off Tysabri after two years or putting patients on drug holidays. If this trend continues, Tysabri patient and revenue growth -- already stunted -- could stall further.

Biogen Idec shares Tysabri revenue with Irish drugmaker Elan ( ELN). Tysabri was re-launched in July 2006.

"While bulls point to a potential for re-acceleration and a PML (a potentially fatal brain disease) rate less than expected, we see emerging evidence that the risk of PML is increasing with duration of therapy and the real rate is likely to increase to an as yet unknown number. If true, risk premium in the stock is likely to increase and numbers will likely decrease over the next several quarters," said Morgan Stanley analyst Steve Harr in a research note published Friday night. Harr has an underweight rating on Biogen Idec with a $44 price target.

This morning, Deutsche Bank biotech analyst Mark Schoenebaum downgraded Biogen Idec to hold from buy because the stock at $50 "is now pricing in reasonable Tysabri expectations and no longer warrants being one of our 'top picks' in 2009."

Elan shares closed Friday at $7.96. Novartis is reportedly in negotiations to acquire a stake in the Irish drug maker, according to a Reuters report over the weekend.

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