Elan; Biogen withdraw multiple sclerosis drug after death

Tuesday, March 1, 2005

Élan, the largest Irish pharmaceutical company, and its US partner Biogen have withdrawn the multiple sclerosis drug Tysabri from clinical trials after the death of a patient. The drug was seen by many as a possible blockbuster drug with the potential to alleviate much of the suffering of the millions of multiple sclerosis suffers worldwide. However it is now quite unlikely that it will ever make it to market.

The news has seen the shares of both companies fall steeply, with Élan having lost almost 70% of its value after Monday's announcement. Two years ago Élan was the largest Irish PLC, with a value in excess of $20bn, but an accountancy scandal saw its shares fall from over €73 to €1.50 within a few weeks. Since then the stock had risen back to trade between €16 and €18 a share on the back of good restructuring news. However the withdrawal of Tysabri leaves Elan with almost no potential future revenue streams.

Biogen shares which had hit a 52 week high of $70 just two weeks before the announcement have since fallen to just $41.26. Combined equity losses on Monday for the two firms was over $17.8 billion.

The paitent who died had been taken in combination with another drug - Avonex - for the last two years. If it emerges that the death was as a result of taking Avonex, then it is possible Tysabri could be re-introduced to the market. However for the moment rivals will be seeking to steal a lead in the potentially lucrative MS drug market.