Elan and Biogen have agreed to pitch Tysabri as a treatment on its own, rather than for use alongside other immunosuppresant drugs. The three clinical patients who developed an extremely rare brain infection — progressive multifocal leukoencephalopathy, or PML — after using Tysabri had also been on Avonex, another Biogen drug. Two of the patients died.

“No patient has yet (developed) PLM on monotherapy. That’ll be very clear on the label,” said Elman, whose team spent last summer conducting an extensive safety review on the treatment.
http://www.timesonline.co.uk/article/0,,2095-2069754,00.html
The Sunday Times - Business

The Sunday Times March 05, 2006

Special report: Market lays bet on Tysabri verdict
It's judgement day for Elan's many investors, writes Joe Brennan
LAS VEGAS may be the home of gambling in America, but action at the Holiday Inn in Gaithersburg, Maryland, this week is attracting the attention of some high-rollers indeed.

The hotel’s ballroom is getting a final clean this weekend ahead of the US Food and Drug Administration’s (FDA) two-day public meeting on Elan’s and Biogen’s multiple sclerosis drug, Tysabri, which was withdrawn from the market 12 months ago on safety grounds. The panel’s recommendation should prove pivotal as to whether the FDA will allow the drug to be relaunched. Trading in shares in both companies will be suspended during the meeting.

Elan and Biogen are not the only ones having another roll of the dice. The spread-betting firm WorldSpreads says that it has seen a marked pick-up in punter interest in Elan ahead of the meeting.

“Just two weeks ago, we were only dealing with two or three trades in Elan a week. It’s now 15 or maybe even 20 a day,” said David Lynch, a senior dealer at the firm. “It’s mainly small or medium players that are trading it and there are definitely one or two among them that were badly hit a year ago.”

The 70%, one-day slump in Elan’s share price last February left ordinary shareholders licking their wounds, but it was those who had taken out spread bets or contracts for difference who felt most pain. These fellows, after all, had effectively borrowed up to 90% of the money that punted on the stock.

This time round punters are not being allowed to take on such risk. WorldSpreads is demanding 60% of the money up front from clients betting ahead of this week’s crucial meeting. “Some of our competitors are calling for 100% up front,” said Lynch.

While the market has become increasingly jittery, with Elan shares having swung between €10.16 and €12.14 over the past two weeks, Lars Ekman, the group’s head of research and development, has been the epitome of coolness.

“I believe the drug will be approved because of its unparalleled efficacy and overall safety profile,” said Ekman.

Elan and Biogen have agreed to pitch Tysabri as a treatment on its own, rather than for use alongside other immunosuppresant drugs. The three clinical patients who developed an extremely rare brain infection — progressive multifocal leukoencephalopathy, or PML — after using Tysabri had also been on Avonex, another Biogen drug. Two of the patients died.

“No patient has yet (developed) PLM on monotherapy. That’ll be very clear on the label,” said Elman, whose team spent last summer conducting an extensive safety review on the treatment.

The two drug-makers received a boost in the middle of last month when the FDA gave them the go-ahead to resume clinical trials for Tysabri.

While advisory panel meetings are normally one-day events, it has been extended to two days to allow for the large number of patients who want to make testimonials on the need for Tysabri to be returned to the market. It is also understood, however, that the widower of one of the PML fatalities will argue for restricting access to the drug.

Analysts largely expect the FDA to give Tysabri the thumbs-up by the end of this month — albeit with restrictions on its use — but nobody is pegging the $3.5 billion (€2.9 billion) peak sales target that was bandied about when the drug was first launched.

Opinion on sales is more divided now. While some Dublin analysts are pencilling in peak sales in the region of $1.8 billion (€1.5 billion), some US brokerages, such as giant Lehman Brothers, believe that they would barely hit $500m.

Ekman is too smart to be drawn in on the peak sales debate. “We have not given a number. We have said which patients should benefit — about 100,000 in Europe and the US that have been on and left other therapies. There is nothing left for them.”

Does the group have a plan-B should Tysabri be rejected by the FDA? “If you take Tysabri out of Elan’s fourth-quarter results last year, it was still Ebitda (earnings before interest, tax, depreciation and amortisation) positive.”

Tysabri, in fact, was a spin-off of Elan’s Alzheimer’s programme. Elan and partner Wyeth hope that one of their treatments for the degenerative disease — AAB-001 — will move into phase three clinical trials later this year. They expect their second drug — ACC-001 — to progress to phase two, and clinical trials to start on a third later this year.

Goodbody Stockbrokers recently forecast that the first two drugs could account for half of what it predicts will be a $10 billion drug market within the next 10 years. It is currently worth $3 billion.

Ekman is even more bullish. “A $10 billion market? That's conservative. I think the companies who are out first with a disease-modifying drug (for Alzheimer’s) will have an outstanding opportunity. We are very well positioned to become that first company.”

More hype, more hope? Conservative investors might be inclined to have next week’s high-stakes event out of the way before laying their chips on the table to have a punt on the Alzheimer's programme.