Two Top Advisors Target Elan

06/23/2006 12:00 am EST

Focus:

Ken Kam

CEO, Marketocracy, Inc.

When two of the very best performing advisors hone in on the same stock we take notice. Here, Louis Navellier, in his Global Growth, and Ken Kam, in Marketscope, both see opportunity in Elan, and its role in treating multiple sclerosis.

"Elan Corp. Plc (ELN NYSE) will put its multiple sclerosis drug, Tysabri, back on the US market in July. At Goldman Sachs' recent Global Healthcare Conference, Elan said that it has reduced the risk to patients who use the drug from developing a neurological disease called progressive multifocal leukoencephalopathy (PML).

"Elan's solution involves patient screenings for PML and close monitoring of patients who use the drug. Patients will be checked three months and six months after receiving their first infusion. Furthermore, Tysabri will only be administered in a hospital, doctor's office, or clinic as a monthly IV infusion. (Elan and Biogen co-own the drug and will share the profits 50-50.)

"Elan also announced that Tysabri will have a wholesale price of $2,185 per 15-milliliter vial, nearly 21% above expectations. The company raised the price to mirror other MS treatments, which have risen between 10% and 27% since November 2004. In our review of stocks for our Global Growth newsletter, Elan ranks as a buy below $17.89."

Adds Ken Kam, "Elan got the go-ahead from the FDA to re-launch Tysabri. In clinical trials, Tysabri has proven to be twice as effective as any other drug at preventing relapses in patients with multiple sclerosis. The drug was first approved in late 2004, but was voluntarily withdrawn from the market in early 2005 after three patients experienced a potentially fatal complication called progressive multifocal leukoencephalopathy (PML).

"After an exhaustive review of all patients turned up no additional cases of PML, it turned out that all three cases of PML occurred in patients who had taken Tysabri in combination with another drug that compromised their immune systems. When the FDA re-approved Tysabri, it restricted its use to patients who are not on any of these other drugs. Wall Street didn't like the restrictions and sold the stock off. In coming months, Elan will re-launch Tysabri in the US and possibly receive European approval. I think the response from MS patients will surprise Wall Street and drive this stock higher. The recent sell off has created a great buying opportunity."

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