Elan and Biogen Idec are facing another delay before the fate of their multiple sclerosis drug Tysabri is decided by the US Food and Drug Administration.

The FDA is taking another 90 days to reach a decision on whether to allow Tysabri (natalizumab) back onto the market. The drug was withdrawn from sale in February 2005 after it was linked to a rare brain disease, progressive multifocal leukoencephalopathy, which caused the death of two patients.

The decision puts Elan and Biogen Idec into another period of uncertainty, just days after an FDA advisory committee voted unanimously that Tysabri be returned to the market for the treatment of patients with the relapsing-remitting form of MS.

The delay is linked to discussions ongoing between the FDA and the companies on a risk-management plan for patients taking Tysabri, which is expected to include a mandatory register of all the patients receiving treatment with the drug. Because PML is often irreversible and there is no treatment, the agency wants to make sure that patients will be aware of the risks and that effective early-warning systems will be in place to pick up any new cases that could arise.

The agency had been due to rule on the application by March 29, but has now set a deadline of June 28.

Tysabri’s withdrawal came as a severe blow to both firms, which were pinning their hopes on the drug for future growth, given that it had been tipped to achieve peak sales of $2 to $3 billion by 2007.

Overhanging concerns about safety, as well as the likelihood that labelling will prohibit its use in combination with existing MS drugs, make it unlikely to reach those sales levels. But it could still find a lucrative niche treating patients with relapsing MS who, for whatever reason, cannot be effectively treated with current drugs, namely Biogen Idec's own Avonex (interferon beta-1a), Serono's Rebif (interferon beta-1a), Berlex/Chiron's Betaseron interferon beta-1b) or Teva's Copaxone (glatiramer acetate).

News of the delay, which was announced in the early hours of this morning, is expected to weigh on the share prices of both companies today.