The value of Irish shares plummeted by 6.5% in Dublin today, as shares in pharmaceutical company Elan lost over 45%. The index had dived as much as 9% earlier this morning with shares in the drug company crashing over 60%.
Elan's massive losses came after the company informed regulators of two new cases of a potentially deadly brain disease arising from the use of its drug Tysabri.
Elan shares crashed €6.15 to close at €7.35 in Dublin this evening - a dive of 45.5%. As Elan is one of the biggest companies on the market, this helped to drag the ISEQ index down by 6.45% to end at 4,090. It had earlier fallen below the 4,000 mark for the first time since April 2003.
Based on its performance over the last 12 months, the Irish stock market is now the world's second worst performing market, behind Vietnam.
The Athlone-based drug company told the markets that two more cases of the brain disease PML had been discovered amongst the almost 32,000 patients prescribed the drug. There is no suggestion that Tysabri will be withdrawn from the market.
Regulators in the US and the EU licensed the use of Tysabri on a restricted basis after an earlier Tysabri scare in 2005 when three patients developed progressive multifocal leukoencephalopathy, a progressive brain disease. On that occasion, two of the patients died.
But investors are worried the news means there will a slowdown in the growth in the numbers of people with multiple sclerosis who are prescribed Tysabri by their doctors. Tysabri packaging carries a warning about the risks of PML. The two new cases were identified in recent days and both are in the European Union.
Doctors specialising in treating MS patients and who prescribe Tysabri are likely to increase their monitoring of patients in an effort to identify PML early.
Elan said that since the drug was brought back on to the market, it has carried an explicit warning on its label about the risk of PML, which is around one in a thousand. The company said that improved vigilance was a key factor in identifying the latest cases.
Speaking on RTE's News at One programme, Elan's CEO Kelly Martin said that despite the news of two new cases of the potentially deadly brain disease PML, there is no reason to take the drug off the market.
He said the drug has had a massively positive effect on MS patients. He also said that both patients with the new cases of PML are doing reasonably well, one is now at home while the other remains in hospital.
After the previous cases of PML some years ago, Elan started a risk programme with the US and EU regulators, which resulted in intensive reviews of patients. The Elan CEO said the company had anticipated some new cases of PML, with the risk factor of about one case of PML for every 1,000 patient treated. Mr Kelly said that about 32,000 patients are using Tysabri at the current time.
He said the Dublin market has reacted so badly to news of the new PML cases because of the highly emotional and volatile nature of stock markets during the past few months. He said the market always reacts to the headline.
He said that PML is actually quite a common side effect from many other drugs.
'There is no reason to take this drug off the market, it is incredibly efficacious, it has a massively positive impact on MS patients and this is part of risk management which today around the world is a very important part of any drug,' he added.
