Better test results for Elan's key Antegren drug pushed the company's shares 13 per cent higher as analysts said the data improved its chances of becoming the leading multiple sclerosis treatment.
Elan said that halfway through a two-year study of 942 patients with relapsing-remitting MS, its Antegren product, also known by the generic name natalizumab, had reduced the rate of relapses by 66 per cent .
"This superior Phase III result is a huge positive, as the expectation had been that it would replicate Phase II results," Mr Jack Gorman, analyst at Davy Stockbrokers said in a research note upping his price target on the stock to $35.
Shares in Elan jumped as much as 13 per cent in London on the news while those of Swiss biotechnology rival Serono, which makes rival MS drug Rebif fell 4 per cent as analysts said Antegren looked set to offer superior treatment.
"The relapse rate data is . . . also significantly better than any drugs currently on the market, which reported a 22 per cent to 40 per cent reduction in relapses," said Mr Ian Hunter, analyst at Goodbody Stockbrokers.
Antegren, which is seen getting US regulatory approval this year, also held out the prospect for safer treatment in terms of side effects than competing products such as one from Germany's Schering, whose shares fell 2 per cent .
Elan stock was 7.7 per cent higher at €23 in Dublin by 10 a.m., outperforming a 0.7 per cent rise for the broader Irish market.
Five per cent of patients treated with Antegren drug suffered side effects such as headaches, fatigue and joint pain, the company said in a statement.
Serious infections occurred in 2 per cent of patients and serious hypersensitivity was observed in about 1 per cent of those treated.
Elan, which has developed the product with US firm Biogen Idec, is counting on approval of the treatment after it had a brush with bankruptcy in 2002.