Makers of Idled MS Drug See Shares Fall
Shares of Biogen Idec Inc. and Elan Corp. plummeted Thursday, a day after the companies confirmed that their once-promising new drug for multiple sclerosis had again been linked to a usually fatal central nervous system disorder.
On Feb. 28, the companies abruptly pulled Tysabri off the market after a patient died of the rare nerve disorder while taking the drug in combination with Avonex, Biogen’s older multiple sclerosis treatment. A few days later the companies said another patient taking the drug combo had developed the same illness, progressive multifocal leukoencephalopathy.
The companies said late Wednesday that a patient who died in 2003 developed the disorder while taking only Tysabri.
“Many on Wall Street had held out hope that it was the combination that was the problem,” said Christopher Raymond, a biotech analyst with Robert W. Baird & Co., who pegged Tysabri’s chances for returning to the market at about 5%. “Now, with this latest case, you can draw a clear line to Tysabri that it is the culprit.”
Biogen spokesman Jose Juves said the Cambridge, Mass.-based company wasn’t giving up on Tysabri and would spend the next several months studying the results of a 3,000-patient trial.
“We’re trying to evaluate the risks here,” he said. “It’s premature to speculate on what will happen.”
Shares of the third-largest U.S. drug company slid 9% on the news, losing $3.84 to $34.51, while Dublin, Ireland-based Elan’s New York-traded shares plunged $3.74, or 54%, to $3.24. Elan’s shares fell more because it is a smaller company and its prospects were more closely tied to Tysabri’s fate, analysts said.
The Food and Drug Administration gave Tysabri fast-track approval in November after the first year of clinical trial showed it was better than existing medicines for multiple sclerosis. Typically, the FDA requires two years of data before approval.
Elan and Biogen said the third Tysabri-related patient incident involved a sufferer of Crohn’s disease, a gastrointestinal disorder, rather than multiple sclerosis, which attacks the nervous system. The Crohn’s patient died in December 2003 after taking eight doses of Tysabri in a clinical trial.
Tysabri acts on immune cells that are believed to cause inflammation of nerve cells in multiple sclerosis patients. Biogen has said that about 5,000 patients in the U.S. had received the intravenous drug since it was approved.
The problems with Tysabri are a big blow to Biogen and Elan, which were counting on the drug to revive growth prospects. The companies lost nearly $18 billion in combined market value when investors dumped their stocks the day the drug was pulled from the market. Several insiders sold shares in the days before the news broke. The company said the sales were previously planned.
Juves, the Biogen spokesman, said Thursday that the company continued to cooperate with the Securities and Exchange Commission in unspecified matters related to the withdrawal of Tysabri.
Biogen, which merged in 2003 with Idec Pharmaceuticals of San Diego, intended to produce Tysabri at a $380-million facility in Oceanside, Calif. The 500,000-square-foot plant, built to produce a drug that was later suspended, has 500 employees. The workers continue to prepare the facility to make Tysabri, the company said.
“In light of the situation, it looks like they are going to have a very nice facility with nothing to make,” analyst Raymond said.
But Juves said the plant could be retrofitted to make other drugs.
