Irish drugs company Elan and its US partner Biogen Idec have been given a green light by the US Food and Drug Administration to put multiple sclerosis drug Tysabri back on the market, but shares were hit by the agency’s decision to reserve it for second-line use.

Only patients "who have not responded adequately to, or cannot tolerate, other treatments for MS" will be eligible to receive Tysabri (natalizumab), according to the agency.

Moreover, patients will have to register to use the drug at specific medical centres, and will have to indicate that they have discussed and understand the risks involved.

Elan’s share price on the New York Stock Exchange suffered as a result of the restrictions, losing 13% to close at $16.52 yesterday, despite the company’s protestations that two thirds of the MS population would still be eligible to receive treatment with Tysabri. Meanwhile, Biogen Idec’s shares also slipped a little under 5% to $45.39 on the news.

Tysabri was suspended from sale early last year after it was linked to a rare brain disease called progressive multifocal leukoencephalopathy. It had been tipped as a possible $2 to $3 billion product when introduced.

But in March, an FDA advisory committee voted 12-0 in favor of returning Tysabri and 7-5 in favor of allowing it as a first-line use, leading some observers to suggest that the drug could come back as a first-line therapy.

On its return, Tysabri should only be used as a monotherapy, according to the FDA, given the fact that the cases of PML occurred when it was used in tandem with Biogen Idec’s Avonex (interferon beta-1a) MS product.

All patients receiving the drug will have to undergo magnetic resonance imaging scans, in order to help differentiate MS lesions that may develop from PML, added the agency.

The product is expected to return to the market within a month. It is only the second time ever that the FDA has allowed a prescription drug to return to market in the US after being suspended for safety reasons.

Meanwhile, in Europe the Committee on Proprietary Medicinal Products for Human Use (CHMP) said last month that Tysabri should return to the market, and a final ruling on the matter is expected in the next few weeks.