Biogen Idec and Elan Corp have suffered a stock slide in after-hours trading after the firms revealed two new cases of progressive multifocal leukoencephalopathy, in multiple sclerosis patients being treated with Tysabri, the brain infection that led to the drug being withdrawn in 2005.

In a filing to the US Securities and Exchange Commission, the two companies said they had notified the relevant regulatory agencies of two confirmed cases of PML in MS patients treated with Tysabri (natalizumab). The first case involves a treatment-naive patient who had been taking the drug as monotherapy for around 17 months, but “remains clinically stable and ambulatory at home”.

The second case involves a patient, who is currently hospitalised, who was taking Tysabri as monotherapy for 14 months but has a history of prior disease-modifying therapies including azathioprine and beta-interferons. These are the first cases to be recorded since the reintroduction of natalizumab in the USA and approval in Europe two years ago. Biogen and Elan had voluntarily withdrawn the drug a year earlier after three patients developed PML.

Since re-introduction, Tysabri has boomed and earlier this month the two companies noted that some 31,800 patients were being treated with the drug, which had second-quarter sales of $200 million. It has also recently been approved in the USA as a treatment for Crohn's disease.

Given the increase in patients on Tysabri, fresh cases of PML come as no surprise and the fact that the plight of the two patients, who are both in the European Union, has been identified so quickly is proof that Biogen and Elan’s stringent monitoring programme for the therapy is working. Nevertheless, as Morgan Stanley analyst Steven Harr has pointed out in a research note, doctors may be less keen to start patients on Tysabri as they are reminded of the long-term potential safety issues.

This is the second blow in as many days for Elan’s stock which lost one-third of its value on Wednesday over mixed data from a Phase II trial of the experimental Alzheimer's drug bapineuzumab which is being developing with Wyeth. The Irish firm and Biogen will host a conference call to discuss the cases at 1:30 this afternoon, UK time.