Shares of biotechnology companies Biogen Idec Inc. (BIIB) and Elan Corp. plc (ELN) fell significantly Friday morning after the companies reported potential brain infections in Tysabri users.
Both firms' stock plummeted as they broke through support, with shares of Biogen tumbling 25% and Elan's stock plunging 45%. Around 10:15 am Eastern Time, shares of Elan's stock was down $9.01 at $11.04 a share, their lowest level since Dec 2005. At the same time, Biogen's stock was down $17.68 at $52.08, its lowest level since June 2007.
After the closing bell on Thursday, the two companies confirmed cases of a potentially deadly brain infection in multiple-sclerosis patients being treated with Tysabri, marking a setback for the drug that was reintroduced in 2006. Both the cases were reported in the European Union.
Tysabri, co-marketed by the two companies and previously named Antegren, has been approved by the U.S. Food and Drug Administration for treatment of multiple sclerosis and Crohn's disease. Multiple sclerosis is an autoimmune condition in which the immune system attacks the central nervous system.
The companies said that on July 31, 2008, they notified relevant authorities about two confirmed cases of progressive multifocal leukoencephalopathy, or PML, in multiple sclerosis patients treated with Tysabri in the commercial setting. PML is a rare and usually fatal viral disease that is characterized by progressive damage or inflammation of the white matter of the brain at multiple locations.
Biogen noted that one patient had been taking the drug for 17 months, while the other patient took it for 14 months. Further, the company said that one of the patients is clinically stable and is at home, while the other patient is hospitalized.
Tysabri was approved in 2004 by the FDA, but was subsequently withdrawn from the market in February 2005 after it was linked with three cases of progressive multifocal leukoencephalopathy. After a review of safety information and no further deaths, the drug was returned to the U.S. market in 2006 under a special prescription program. In the European Union, it has been approved only for the treatment of multiple sclerosis.
In mid-July, the Cambridge, Massachusetts-based Biogen reported an 11% increase in profit for the second quarter, helped by a 28% rise in revenue. The company noted that revenues from Tysabri more than tripled in the quarter to $147.17 million. Of this, $46 million was generated through Elan in the U.S.
Biogen also indicated that at the end of the second quarter, more than 31,800 patients were on commercial and clinical Tysabri therapy worldwide. In the U.S., more than 17,800 were on Tysabri therapy commercially, while more than 3,100 physicians have prescribed the therapy. About 13,400 patients were on Tysabri therapy commercially outside the U.S.
For Ireland-based Elan, the news marks another setback. Earlier this week, the company and pharmaceutical firm Wyeth (WYE) announced results from a Phase 2 study of bapineuzumab in patients with mild to moderate Alzheimer's disease. 12 people with mild-to-moderate Alzheimer's who were treated with the drug developed a build-up of fluid in the brain called vasogenic edema, casting doubt over its clinical value.
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