Elan shares tumble after warning on key drug

SHARES IN biotech group Elan tumbled yesterday after the company warned that its key drug, Tysabri, could cause significant liver damage in patients.

The US regulator, the Food and Drug Administration (FDA) announced that Elan and its US partner Biogen Idec had written to doctors prescribing Tysabri to warn them of the danger.

Shares in Elan dived over 10 per cent within minutes of the news being released in New York. In heavy trade, the stock subsequently recovered some ground to trade 6.21 per cent off at $22.80.

The setback came just a day after Moodys raised the rating on Elan's debt "because of increasing sales of Tysabri".

Yesterday's announcement said that Tysabri "should be discontinued in patients with jaundice or other evidence of liver injury".

Signs of liver injury "occurred as early as six days after the first dose", Elan and Biogen said in the letter to prescribing doctors.

The indications cited in the letter are "generally recognised as an important predictor of severe liver injury that may lead to death or the need for a liver transplant in some patients", the letter continued. A spokeswoman for Elan last night said that the incidence of liver damage in Tysabri patients was rare - less than one in 1,000 patients. A total of 21,100 multiple sclerosis patients were being treated with Tysabri early last month.

The company recently received permission from the FDA to start using the drug as a treatment for Crohn's disease. Elan was confident last night that the latest news would not affect that approval. The potential risk of liver damage was one of the issues debated by an FDA advisory panel ahead of the Crohn's decision.

European medicine regulators have refused to approve Tysabri for Crohn's.

Tysabri was taken off the market in 2005 shortly after its initial launch after three cases of a potentially fatal brain infection known as progressive multifocal leukoencephalopathy emerged. The drug returned to the market in 2006 with limits after the FDA decided MS patients were willing to accept the risks in light of possible benefits. - (Additional reporting Bloomberg)