Elan Corp. shares down after suspending Alzheimer study

NEW YORK - The problems that plagued shares of Irish drug maker Elan Corp. PLC in Europe didn&#39;t find any respite in New York as the stock traded down sharply Friday. <br> <br> Shares of Elan were at $38.45 early Friday afternoon on the New York Stock Exchange, off $6.35, or 14.2 percent on heavy volume. The stock earlier hit a 52-week low of $37.65 Friday, dropping below the previous low mark of $39.35 hit Nov. 13. <br> <br> On this side of the pond, investors sold their stakes of Elan after the company and its development partner American Home Products decided to temporarily suspend dosing patients in the phase IIA clinical study of their Alzheimer&#39;s disease treatment, AN-1792 compound, after unexpected side effects were seen in four of the 97 study participants in France. <br> <br> The central nervous system of those four patients were found to have inflammation, but the cause remains unknown; in at least one case, a preexisting viral infection is thought to be the culprit. <br> <br> The companies plan to conduct an investigation, but they are not stopping the trials testing its compound in mild-to-moderate Alzheimer&#39;s patients. The phase IIA study is ongoing. After the investigation and consultation with an independent committee, study investigators and regulatory authorities, they will provide guidance regarding whether and when they will resume dosing. <br> <br> Not only does Elan believe it can resolve the inflammation issue quickly, it expects to resume the study in time without jeopardizing the study conduct. <br> <br> While investors interpreted the news as a blow to Elan&#39;s Alzheimer&#39;s vaccine treatment program, analysts were mixed because they were not expecting any regulatory submission for approval until 2005. <br> <br> SG Cowen&#39;s Ian Sanderson, who downgraded the shares to buy from strong buy, doesn&#39;t think the inflammation issue will turn out to be a big deal or cause a filing delay. However, he acknowledges it does &#34;reduce visibility.&#34; <br> <br> Additionally, Sanderson believes the shares are taking a hit from low investor confidence in the company&#39;s ability to meet the Street&#39;s 56 cents-a-share fourth-quarter earnings estimate without hurting the quality of the earnings. <br> <br> <br>

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