Court dismisses Tysabri suit against Elan

NEW YORK U.S. District Judge Richard Holwell in Manhattan has thrown out a class action lawsuit brought by investors against Elan Corp. regarding its multiple sclerosis drug Tysabri.

The company—and its excecutives—stood accused of artificially inflating the company’s stock through misrepresentations and omissions regarding the safety, commercial viability and projected market share of the drug. In an opinion posted on Friday, Holwell said the plaintiffs in the case had failed to adequately show that Elan and its executives had motive and opportunity to commit fraud.

Tysabri, a product of Biogen Idec and Elan, had previously been temporarily suspended from the market in 2005 after some patients developed a potentially deadly brain infection. It was then allowed back in 2006, though with certain restrictions, as the Food and Drug Administration felt that multiple sclerosis patients were willing to accept the risks in return for the potential benefits.