U.S. securities regulators are investigating Elan's disclosure practices. The Irish drugmaker was subpoenaed by the Securities and Exchange Commission about two events: First, the July 31, 2008, announcement of two cases of progressive multifocal leukoencephalopathy, a potentially fatal brain infection, found in patients taking its multiple sclerosis drug Tysabri. Second, its release two days earlier of data from a clinical study of its experimental drug for Alzheimer's disease, bapineuzumab.
Elan disclosed the probe in documents filed for a $600 million bond issue. "We intend to provide the SEC with materials in connection with the investigation," the company said in the filing (as quoted by Bloomberg).
The two drugs at the center of the disclosure question are key products for Elan. Tysabri, as you know, was withdrawn because PML cases cropped up in several patients, then came back on the market under a strict risk management/disclosure plan. In summer 2008, Elan and Biogen announced two new cases of PML, and additional cases have been announced since. Still, the drug's sales are growing and it remains Elan's biggest product with $557 million in 2008 sales, up 140 percent over the year before.
Bepineuzumab, meanwhile, is one of the major reasons Johnson & Johnson recently bought a minority stake in Elan and ploughed an additional half-billion dollars into its Alzheimer's drug pipeline. Those two deals closed just two weeks ago.
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