Shares in Ireland's Elan Corp and its US partner Biogen Idec have risen on the news that the firms have filed for approval of their multiple sclerosis drug Tysabri to treat patients with moderately to severely active Crohn's disease.

The firms’ supplemental Biologics License Application filing to the US Food and Drug Administration is based on the findings of three Phase III trials assessing the safety and efficacy of Tysabri (natalizumab) as both an induction and maintenance therapy. The drug is already being evaluated as a treatment for Crohn's by the European Medicines Agency using the same data package.

The bid for a new approval for Tysabri is the latest chapter in the drug's somewhat chequered history. The companies withdrew the treatment and stopped all ongoing clinical trials with the drug in March 2005 just three months after it won US approval for MS, following reports of cases of the rare brain disease PML (progressive multifocal leukoencephalopathy).

Biogen and Elan developed a risk-management plan to give early warning if cases of PML occurred again and the product returned to the market in July this year but sales have been slow since it was reintroduced, as doctors and patients remain cautious about its safety and only available through a restricted distribution programme.

Analysts have already discounted any major impact to Biogen's earnings from an approval for Crohn's but the smaller Elan is reliant on Tysabri's revenues and the green light for a new indication would be welcome.

Elan gets $49.8 million from King

Elan has received a financial boost after King Pharmaceuticals was ordered to pay the Irish firm $49.8 million in milestone payments and expenses in a binding arbitration decision over a dispute concerning its insomnia product Sonata (zaleplon).

King bought Elan’s primary care division in 2003 and acquired Sonata but in early 2005, told Elan it considered an agreement to develop a modified release formulation of the terminated over the latter’s failure to “satisfy the target product profile," a claim which was disputed.