FDA Allows MS Drug Tysabri Back on Market

By Susan Heavey

WASHINGTON (Reuters) – U.S. health officials cleared the way on Monday for multiple sclerosis drug Tysabri to return to the market with restrictions, following its withdrawal last year when it was linked to a rare but potentially fatal brain disease.

Three patients taking the drug, made by Biogen Idec Inc. and distributed by Elan Corp., had developed progressive multifocal leukoencephalopathy (PML). Two of them died.

Food and Drug Administration officials, who faced calls from patients to revive sales, said they still know very little about how to predict, prevent or treat the brain disease.

"We are certain that patients are willing to take this risk because of the potential benefits of the drug," Dr. Steven Galson, director of the FDA’s Center for Drug Evaluation and Research, told reporters.

Tysabri should be used alone and not with other drugs that suppress the immune system, the agency said, and patients should try another MS therapy first.

The rare decision by regulators to allow a withdrawn drug back on the market failed to boost the companies’ shares, which sank on the news.

Analysts said calling for patients to first try other MS drugs could curb demand for Tysabri, which had been on track to be a potential billion-dollar-a-year seller before the withdrawal.

"The new label suggests that demand for Tysabri could be less than our recently adjusted forecast," Sanford C. Bernstein & Co’s Geoff Porges said in a research note.

Renewed sales are seen as key to helping Elan recover from a brush with bankruptcy in 2002.

RBC Capital Markets analyst Jason Kantor estimated U.S. sales would reach $36 million in 2006, $439 million in 2007 and $806 million in 2008.

Elan shares closed down 13 percent, or $2.46, at $16.52 on the New York Stock Exchange, while Biogen was off 4.9 percent, or $2.32, at $45.39 on Nasdaq.

Both companies said Tysabri would give MS patients another option to treat their debilitating disease.

"There continues to be a significant unmet medical need where Tysabri will be an important treatment option," Elan Chief Executive Officer Kelly Martin said in a statement.

According to the National Institutes of Health, about 250,000 to 350,000 Americans have been diagnosed with MS, a disease of the central nervous system with no known cure.

Patients with the degenerative disease face attacks on their nerve tissue by their immune system, initially causing blurred vision and leading to muscle weakness and memory problems, among other symptoms.

Under the FDA-approved plan, doctors, infusion centers and pharmacies must register with the companies before prescribing Tysabri. Patients must also enroll.

As another safeguard, patients must receive an MRI, or magnetic resonance imaging, scan before treatment to help differentiate MS symptoms from those linked to the brain disease, the FDA said.

Still, more patients are likely to contract PML.

"We expect, yes, that there will be other cases and there probably will be additional deaths," said Dr. Russell Katz of FDA’s Division of Neurology Products. Currently, the risk is estimated at 1 in 1,000, he said.

Biogen officials said they hope to relaunch the drug in July. Last month, Elan said it may also raise the price.

Lehman Brothers analysts have said Tysabri could win 10 percent of the market from competitor Serono SA’s Rebif within two years.

Other MS treatments include Serono and OSI Pharmaceutical Inc.’s Novantrone, Biogen’s Avonex, Schering AG’s Betaseron, and Teva Pharmaceutical Inc.’s Copaxone.

(Additional reporting by Deena Beasley in Los Angeles)