2nd UPDATE:SEC Subpoenas Elan For Tysabri Infection Case Info
29 September 2009 - 11:04PM
Dow Jones News
Irish drug maker Elan Corp. PLC (ELN) said Tuesday it received a
subpoena from the U.S. Securities and Exchange Commission seeking
information related to disclosures last year about Elan's
multiple-sclerosis drug Tysabri and an experimental Alzheimer's
disease drug - disclosures that battered Elan shares.
Wyeth (WYE), Elan's partner in the Alzheimer's drug program,
also received an SEC subpoena related to disclosure of
clinical-trial data for the drug last year. A Wyeth spokesman said
the company, which has agreed to be acquired by Pfizer Inc. (PFE),
is working to provide the SEC with the information.
Elan disclosed in a regulatory filing it received the subpoena
Sept. 24 from the SEC's New York office, and it intended to provide
the SEC with materials in connection with the commission's
investigation into Elan.
The exact nature of the SEC's investigation wasn't immediately
known, and a commission spokesman declined comment. An Elan
spokesman reiterated that the company would provide the SEC with
the information, but didn't provide additional details about the
exact nature of the probe.
The subpoenas concern two separate announcements related to Elan
last year. On July 31, 2008, Elan and its marketing partner, Biogen
Idec Inc. (BIIB) notified regulatory agencies of two confirmed
cases of a rare brain infection called progressive multifocal
leukoencephalopathy, or PML, in multiple-sclerosis patients treated
with Tysabri. Tysabri had previously been withdrawn from the market
due to PML risk, then relaunched, and the companies have monitored
the side effect closely.
There have been at least 16 PML cases in Tysabri patients in
total, 13 of which occurred after the drug was brought back to the
market in 2006 under rules meant to reduce the PML risk, such as
preventing patients from taking another MS drug at the same
time.
Separately, on July 29, 2008, researchers presented the results
of a mid-stage patient trial of bapineuzumab, an Alzheimer's drug
Elan co-developed with Wyeth (WYE), at a medical-meeting in
Chicago. Wyeth and Elan said the data supported their prior
decision to move the drug into late-stage trials, which are still
underway.
But the full data presentation for bapineuzumab disappointed
many investors, who felt it was less impressive than the
preliminary findings Wyeth and Elan had included in a June 2008
press release.
Elan's American depositary receipts were quite volatile during
this period. They closed at $33.75 in regular trading on July 29,
2008, and the bapineuzumab data were released after market hours.
The stock proceeded to lose 40% in value the next day, then dropped
50% on Aug. 1 after the disclosure of the PML cases.
Elan's ADRs ended Tuesday at $7.27, off 7 cents.
In February 2009, Elan disclosed in a regulatory filing that the
SEC had begun an informal inquiry related to the disclosure of the
Tysabri PML cases. Also, the SEC previously conducted an informal
inquiry of securities trading surrounding the February 2005
announcement of the suspension of marketing of Tysabri.
Separately, lawsuits seeking class-action status have been filed
against Elan on behalf of purchasers of Elan shares between May
2007 and October 2008, alleging Elan issued false and misleading
public statements about the safety and efficacy of bapineuzumab.
Similar lawsuits alleging Elan made false and misleading statements
prior to Tysabri's withdrawal were dismissed.
Johnson & Johnson (JNJ) recently acquired Elan's rights in
the Alzheimer's disease partnership with Wyeth, and acquired a
minority stake in Elan.
Spokespeople for J&J and Biogen declined to comment.
-By Peter Loftus, Dow Jones Newswires; 215-656-8289;
peter.loftus@dowjones.com
(Thomas Gryta in New York and Keith Winstein in Boston
contributed to this article.)