Despite a positive recommendation from a joint FDA advisory panel on the use of Tysabri (natalizumab) in Crohn's disease, Wall Street remained largely indifferent as analysts predicted only a minimal bump in sales revenues for co-developers Biogen Idec Inc. and Elan Corp. plc.

Both companies' stocks got a small after-market boost following the 12-3 vote late Tuesday afternoon by members of the Gastrointestinal Drugs Advisory Committee and the Drug Safety and Risk Management Advisory Committee in favor of Tysabri's use in Crohn's disease (CD) patients who have failed or cannot tolerate existing therapies. But share prices reflected only the slightest changes Wednesday, with Cambridge, Mass.-based Biogen (NASDAQ:BIIB), closing at $55.63, down 91 cents, and partner Dublin, Ireland-based Elan (NYSE:ELN) losing 10 cents to close at $18.63.

The chief issue before the panel was whether Tysabri, a recombinant anti-alpha4 integrin monoclonal antibody, had an appropriate risk/benefit profile for the CD population. The drug was pulled from the market in February 2005, only a few months after gaining approval for multiple sclerosis, and ongoing trials in MS and CD were halted after two patients contracted progressive multifocal leukoencephalopathy (PML), a potentially fatal brain infection. Further analysis and review by the agency led to the drug's return to the market, with limited use in MS patients.

In briefing documents released prior to Tuesday's meeting, FDA reviewers said the PML risk in MS patients was countered by the "unprecedented treatment effect in that population;" however, that risk/benefit ratio is "considerably different" in CD, in which Tysabri demonstrated an absolute treatment effect of 42 percent to 49 percent, making it, at best, equal to existing therapies, rather than superior.

Given those concerns, along with the fact that European regulators adopted a negative opinion a few weeks ago on Tysabri in CD patients - Biogen and Elan plan to appeal that opinion, with a decision on the appeal expected by the first quarter of 2008 - the FDA panel's vote leaves the industry "incrementally optimistic" of Tysabri's approval in CD, analyst Christopher Raymond, of Chicago-based Robert Baird & Co., wrote in a research note.

The FDA, which has set a PDUFA date of Oct. 15 for the drug's review, generally follows the recommendation of its advisory panels.

However, Raymond and other analysts are anticipating a restrictive label that would limit Tysabri's use in patients who have failed other therapies, such as steroids, immunosuppressants and TNF-alpha inhibitors. It's also likely that, as its label for MS, Tysabri could be limited to use as a monotherapy, since previous studies have suggested a potential increase in PML risk when the drug is taken concurrently with immunosuppressants. Patients with CD are more likely than MS patients to be prescribed immunosuppressant drugs.

"Given the proposed restricted and narrow label, we believe the Tysabri opportunity in CD will ultimately prove small with limited impact" on Biogen's earnings per share, wrote analyst Adam Walsh, of Jefferies & Co. Inc. in San Francisco.

Both Raymond and Walsh refrained from making changes to their respective Tysabri models at this time, and analyst Joel Sendek, of New York-based Lazard Capital Markets, projected a slight increase in Tysabri sales in 2008 to $282 million, to include "modest penetration in CD, as we expect the drug to be used only the most severe cases."

Worldwide, Tysabri sales for the second quarter totaled $72 million.

As part of its recommendation, the joint advisory panel suggested that the companies conduct additional analyses to determine the CD population most inclined to benefit from Tysabri treatment and look at longer-term safety data. Panel members also stated the need for strict post-marketing surveillance.

Biogen's and Elan's marketing application for Tysabri in CD was based on data from two Phase III induction studies and one maintenance study. Though the first Phase III study failed to show a statistically significant difference in clinical response rates, defined as CDAI (Crohn's Disease Activity Index) reduction of 70 or more from baseline, a subsequent subset analysis demonstrated that patients with elevated CRP had a higher clinical response rate compared to placebo. The second study, which specifically enrolled patients with elevated CRP, yielded positive results, showing response rates of 48 percent compared to 32 percent for patients in the placebo arm.