Now that Elan Corp. PLC has sold its drug delivery business to Alkermes PLC, the Irish company can now focus on its multiple sclerosis drug Tysabri (natalizumab), which grew by 23% over the last year despite a new test that has pushed some patients to stop taking the drug.

Tysabri is currently approved in the U.S. for relapsing forms of MS in patients who are unable to tolerate other treatments. Sales of the drug, which Biogen Inc. co-markets, reached $1.5 billion in 2011, Elan announced Feb. 8. The partners drove up unit growth 16% and added 7,200 new patients, an increase of 13% year over year. The growth came despite a year of flux for Tysabri; a test was launched in Europe and the U.S. that identifies patients with JCV antibodies that put them at risk of developing progressive multifocal leukoencephalopathy (PML), a rare, often fatal brain disease.

Many believe that the drug, which the MS community considers highly effective, has not reached its peak sales potential largely because of concerns about PML risks. Several thousand MS patients have tested positive for the antibodies and stopped using the drug. Between the time the assay went on the market in both the EU and U.S. last year, and as of Dec. 31, approximately 87,000 JCV tests were conducted globally.

“Advancement with Tysabri risk stratification in 2011 also exceeded expectations and is facilitating a more personalized approach to treatment selection,” said Douglas Love, head of Tysabri business for Elan, during the fourth quarter conference call on Feb. 8. ”As a result, we expect the discontinuation rate to moderate in 2012 and net patient additions to accelerate over the course of the year.”

Love added that JCV-negative patients are now using the drug earlier in the treatment process. Starting treatment earlier has not been proven to slow progression of the debilitating disease, but potentially could. FDA added JCV risk to the Tysabri label on Jan. 20, making the JCV assay a part of determining treatment Also see "Tysabri’s PML Risk Quantified In Revised Label; Can Added Certainty Add Scripts?" - Pink Sheet, 23 January, 2012.. “The label provides that infection by the JC Virus is necessary for PML development and endorses use of the assay to confirm whether the patient has been infected. We are now able to speak actively with neurologists regarding risk stratification as they have personalized discussions with patients of the benefits and risk of utilizing Tysabri to treat their disease,” said Love.

In addition, even as new competition looms, Elan and Biogen are working on lifecycle management programs for Tysabri. The partners announced in late January that they are conducting a Phase IIIb study of Tysabri for secondary-progressive multiple sclerosis (SPMS) referred to as ASCEND. The study will evaluate Tysabri’s potential in preventing the worsening of walking, hand movement and daily functioning in SPMS patients and will include 850 SPMS patients from 15 countries.

Other Opportunities For Elan

One of the biggest opportunities for Elan could be the Alzheimer’s drug bapineuzumab, which is being jointly developed by Pfizer Inc. and Johnson & Johnson subsidiary Janssen AI (JAI). Under terms of a deal worked out in July 2009, Elan owns a 49.9% stake and is therefore entitled to 25% of any profits from the drug Also see "Elan Insists Remaining Alzheimer's Portfolio Has Deep Roots And New Shoots" - Pink Sheet, 20 July, 2009.. With two representatives on the joint venture’s board and various employees involved in the scientific decisions, Elan has had an active role in the drug’s development, Kelly Martin, Elan’s CEO, told analysts. J&J has contributed about $500 million to JAI, so far and Elan expects to begin contributing to its financial portion of that venture in the second half of this year. As per the original agreement, Elan will finance JAI up to $200 million, with about $60 million to $80 million being paid out this year.

Phase III trial results for the high-risk, high-reward drug are expected in mid-2012. “If bapi data is strong, the drug will no doubt become a blockbuster, and Elan will receive a quarter of the profits. However, based on mixed Phase II results and a pile of previous failures at other firms in this therapeutic area, we think it is more likely to fail than succeed,” said Morningstar analyst Karen Andersen.

Elan will still be keeping a close eye on Alkermes and its former Elan Drug Technology unit due to the company’s 25% stake in Alkermes Also see "Elan Unit’s Acquisition Brings Diversification, Cash Flow, To Alkermes" - Pink Sheet, 16 May, 2011.. “We are extremely pleased with the progress that the Alkermes management has made with their business, we are extremely bullish on the prospects of their business,” said Martin, who is expected to step down this year after a controversial tenure that saw Elan reach significant scientific heights even as it drew shareholder ire for over-spending and excessive management payouts.

Elan is required to hang on to the Alkermes stake until mid-March and then has plans to monetize its stake in the company. “We will be working very closely with Alkermes senior management on an orderly logical rational approach to how we monetize that stake over time and we will use those proceeds in a variety of ways from our business point of view,” added Martin.

Alkermes paid $500 million in cash for the EDT business and paid the rest of the $1 billion price tag with the equity stake. The sale allowed Elan to cut its significant debt in half, a key concern of investors. It now has $625 million in debt on its books due October 2016.

Chairman Robert Ingram and director, Kieran McGowan are leading the search, but weren’t ready to reveal details.

As Majority Of U.S. Patients Tested For JCV, Tysabri Sales Rise, Elan Says

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