Straight after Elan’s share price collapsed following the company’s decision, taken along with US partner Biogen Idec, to withdraw its multiple sclerosis drug Tysabri (natalizumab), after it was linked to two cases of progressive multifocal leukoencephalopathy – a rare central nervous system disease [[01/03/05a]] – analysts were considering the long-term effects the move could have on the Irish-based firm.
Global Insight’s senior healthcare analyst Henry Dummett said: “Both companies are now faced with an anxious period of investigation” to assess the safety profile of Tysabri as this is likely to determine the scope of further clinical trials, “which, in turn, will influence if and when the drug makes a return to the market.”
Mr Dummett’s report also notes: “This solemn outlook is in stark contrast to the fanfare that heralded Tysabri’s approval” in the USA last November [[24/11/04a]]. However, he added that, “while a shadow now hangs over the safety of the drug, there is little doubt over its efficacy,” noting that the two-year clinical trial that is now at the centre of the safety scare also produced impressive efficacy data [[17/02/05a]].
However, all that has been forgotten for the time being, especially for Elan. Coupled with the recent approvals for the pain-relief drug, Prialt (ziconotide), in both Europe and the USA [[23/02/05a]], [[04/01/05d]], the report states that Tysabri had been expected to act as the main driver for recovery at the Irish company, which was on the verge of bankruptcy not so long ago [[08/02/02b]].
“Prialt is a potentially lucrative drug,” says Mr Dummett, “but a disturbing 70% share-price fall in response to the Tysabri withdrawal illustrates all too clearly that most of Elan’s value is tied up in the MS drug.” If it stays off the market for some time, “Elan’s anticipated return to profitability in 2006 will remain a pipe-dream,” he added.
The news has also shown the limitations of Biogen Idec’s pipeline, once again highlighting its reliance on the MS drug, Avonex (interferon beta-1a), and the non-Hodgkin’s lymphoma agent, Rituxan (rituximab). Indeed, the Global Insight report concludes: “It is no exaggeration to state that the company’s entire strategy for the management of its portfolio… will lie in ruins if Tysabri fails to make it back to the market.”