October 29, 2008 / 8:59 PM / 9 years ago

UPDATE 2-Biogen reports another Tysabri brain disease case

(Adds analyst comments, background, byline, updates share price)

By Deena Beasley

LOS ANGELES, Oct 29 (Reuters) - Biogen Idec Inc (BIIB.O) said on Wednesday that it has notified regulators of a new case of a potentially deadly brain disease in a multiple sclerosis patient being treated with Tysabri in the United States.

The company’s shares fell about 12 percent in after-hours trading.

“This creates a further overhang on the stock. It’s inevitably going to worry investors about what’s around the corner and it’s just too early to know what the true rate is for PML with Tysabri in commercial use,” said Jim Birchenough, an analyst at Barclays Capital.

Biogen and marketing partner Elan Corp Plc ELN.I said in July that two new cases of the brain infection, known as progressive multifocal leukoencephalopathy (PML), had emerged in Europe.

They were the first PML cases to be announced since Tysabri was withdrawn from the market in 2005 after three patients developed the brain infection.

The drug returned to the market in 2006 with warnings after the U.S. Food and Drug Administration decided MS patients willing to accept the risks should be able to have access to the drug’s potential benefits.

“Since the last two cases were disclosed we’ve had about 3,000 patients on the drug -- about 1,000 a month ... I think every case that comes along next will have minimal impact as long as that rate stays about 1 in 1,000,” said Cowen & Co analyst Eric Schmidt.

But Birchenough said Tysabri sales trends are sensitive to even a single case of PML and there is concern that physicians may hesitate to start new patients on the drug.

“The problem for Biogen is this is their only growth driver,” he said.

Biogen said last week that 35,000 patients worldwide were being treated with Tysabri and it continued to expect that 100,000 patients will be taking the drug by 2010.

Tysabri also won U.S. approval this year to treat adults with moderate to severe Crohn’s disease who have had a poor response to, or cannot take, other therapies.

Shares of Biogen, which fell 41 cents to close at $41.94 on Nasdaq, were lower at $37.00 after hours. (Additional reporting by Bill Berkrot; Editing by Bernard Orr)

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