Biogen, Elan shares fall on brain infection fears
Shares of Biogen Idec Inc. fell as European regulators investigate reports of 23 cases of Tysabri patients with a potentially fatal brain infection.
The stock of the Cambridge company was down $2.67, or 5.65 percent, to $44.56 in afternoon trading. Shares have traded between $37.21 and $55.34 over the past 52 weeks. American depository shares of Biogen's partner, Elan Corp., fell $1.26, or 19.6 percent, to $5.17.
The multiple sclerosis drug was pulled from the market in 2005 due to concerns about the condition, called progressive multifocal leukoencephalopathy, or PML. Sales resumed in July 2006 with restrictions and a monitoring program. As of July 2009, the company had reported 11 cases of the condition and said it would stop updating reports of additional cases.
Analysts have mainly brushed off ongoing concerns of PML risks, with many saying they have already been priced into the stock. Still, some do not expect sales of the drug at the same levels they were before the PML issues.
"PML rates are exactly as we predicted in July," said Leerink Swann analyst Dr. Joshua Schimmer, in a note to investors. "If anything, our view of the Cylex assay (safety monitoring) is improving."
He called the stock's weakness Friday an "overreaction" and said double counting some patients may have pushed the actual number up too high. The true number of new patients could actually be 20, he said.
In July, Schimmer projected there would be 21 new cases from August 2009 to January 2010.
"With nine new cases, assuming 20 in total, since the end of July, we are right on track with where we should be based on the large number of Tysabri patients on therapy," he said.
Deutsche Bank-North America analyst Mark Schoenebaum said he is remaining on the sidelines until the actual number of new PML patients since July are sorted out.
"We don't think there is material risk that Tysabri is pulled from the market," he said, in a note to investors. "The reasonable risk, however, is that regulatory bodies conclude that time on drug is a risk factor for PML and recommend or mandate drug holidays."