On July 31, Biogen (BIIB) and Elan (ELN) reported two new cases of brain disease in multiple sclerosis [MS] patients treated with Tysabri. Caris analyst David Moskowitz says despite a number of PML reports in FDA's Adverse Events database, Elan continued to posture that these incidences were of no concern. In fact, he says the company's recent strategy has been to push drug aggressively.
Moskowitz says today's cases should not be a surprise. He believes that if the drug is not withdrawn from market, sales growth is likely to be severely hampered, given this news and the likelihood that more cases will emerge.
He cuts in-market sales estimates for the product to $781 million from $876 milion in 2009 and to $934 million from $1.39 billion in 2010. With his peak sales estimate for Tysabri declining from $3.6 billion to $1.34 billion, he lowers price target on shares from $15 to $9.
