ELN

[David Randolph]

Elan Corporation PLC. (ELN) The Group's principal activity is that of a neuroscience-based biotechnology that is focused on discovering, developing, manufacturing, selling and marketing advanced therapies in neurodegenerative diseases, autoimmune diseases and severe pain.

Elan has been around for many, many years in the biotechnology sector, as you can see from this all history chart:



The stock plummeted from the middle of 2001 and recently fell on the abyss:



The gap down was due to these news:

Biogen, Elan Voluntarily Suspend Tysabri

But some months later we were getting this:

Elan Predicts Suspended Drug Will Return

Elan CEO Confident on Tysabri's Future

And yesterday Biogen released this:

Biogen says Avonex, Tysabri combination met primary endpoint

By the way, ELN almost everyday has news or press releases and it is one of the most active stocks on the NYSE.

The chart suggests a pretty strong rebound is in the making concerning the stock price. Maybe a good candidate to be on the 3 Stocks on Fire Portfolio.

I've decided to buy ELN at today's open, 6.66% of the 3 SOF Portfolio.

This analysis is part of «Top 5 Stocks for Tuesday», conducted by David Randolph, where he looks for stocks that have a chance of being bought for the 3 Stocks on Fire Portfolio. The portfolio is up 136% since May 2005.

www.3stocksonfire.org is a T2T project, which means it is made by traders to traders and investors. We have an already large community of investors changing strategies and stock picks. If you want to join our community and receive our free newsletter, please register.

[basonista]

Excellent choice, David.  I have been trading Elan from $3.52 in April after considerable research into Tysabri and learning of it's value to the MS community.  Most believe that it's not a matter of IF Tysabri will return to market but WHEN.  Tysabri's fate will be clearer by the end of the summer but news like yesterday's only strengthen it's outlook.

Although it may stay strong, the stock has dipped (sometimes considerably) between press releases in the past, so anyone looking to get into it may wish to wait for the next dip or a little pull back.

Glenn 

[dez]

Nice pick David.  I like the stock and the sector.  As always with bio-tech its the timing or some news event that guns the stock.

So I approached this play this morning by taking out a long term option.  I bought the Jan '06 ELNAA call option with strike price of 5.  My entry cost is 3.60

Stated another way I paid a .60 cent premium for all this time from now thru Jan '06  If and when this stock breaks thru $8.00 we will be on our way.

[cumulina]

I'm in, David.

I was watching ELN when it dropped a couple of months back - glad I wasn't in then, but glad to be in now!

News today:

Two-Year Sentinel Data Evaluating TYSABRI(R) in Addition to AVONEX(R) Reinforce Efficacy in Multiple Sclerosis
07/18/2005 16:16


Compared to AVONEX Alone, Data Show 24% Reduction in the Risk of Disability Progression and Sustained 56% Reduction in Relapse Rate

Biogen Idec (NASDAQ: BIIB) and Elan Corporation, plc (NYSE: ELN) announced today that SENTINEL, the Phase III TYSABRI(R) (natalizumab) add-on trial with AVONEX(R) (Interferon beta-1a), achieved the two-year primary endpoint of slowing the progression of disability in patients with relapsing forms of multiple sclerosis (MS). The addition of TYSABRI to AVONEX resulted in a 24 percent reduction in the risk of disability progression compared to the effect provided by AVONEX alone. Data from SENTINEL also demonstrated that the addition of TYSABRI to AVONEX led to a 56 percent relative reduction in the rate of clinical relapses compared to that provided by AVONEX alone. The reduction in relapse rate was statistically significant and sustained over the entire two-year study period.

Other efficacy data from SENTINEL at two years, including MRI measures and immunogenicity, were similar to previously reported one-year results.

Common adverse events included headache, nasopharyngitis, limb pain, depression, flu-like symptoms, diarrhea, insomnia, sinusitis, influenza, nausea, muscle pain, anxiety and cough. The rate of infection was 1.6 per patient-year in both AVONEX plus TYSABRI-treated patients and AVONEX plus placebo-treated patients. Serious infections occurred in 2.9 percent of AVONEX plus placebo-treated patients and 2.7 percent of AVONEX plus TYSABRI-treated patients. TYSABRI has been associated with hypersensitivity reactions, including serious systemic reactions which occurred at an incidence of less than 1 percent of patients.

On February 28, 2005, Biogen Idec and Elan announced that they voluntarily suspended TYSABRI from the U.S. market and all ongoing clinical trials based on reports of progressive multifocal leukoencephalopathy (PML), a rare and potentially fatal, demyelinating disease of the central nervous system. The companies have previously reported three confirmed cases of PML, two of which were fatal. Two of the patients with confirmed PML had received AVONEX plus TYSABRI for over two years as part of the SENTINEL trial. Biogen Idec and Elan's comprehensive safety evaluation concerning TYSABRI and any possible link to PML is ongoing. The results of this safety evaluation will be discussed with regulatory agencies to determine the appropriate path forward for TYSABRI.

"These data demonstrate the effect of TYSABRI on disability progression and clinical relapses. We continue to believe in the therapeutic benefit of TYSABRI in MS, a disease with significant unmet medical need," said Burt Adelman, MD, executive vice president, Development, Biogen Idec. "Our extensive safety evaluation, in collaboration with leading experts and regulatory agencies, is on track and we hope to have findings by the end of the summer. As always, our primary commitment is to improving the lives of people with MS."

"TYSABRI continues to show benefit in the treatment of immune-mediated diseases," said Lars Ekman, MD, PhD, executive vice president and president, Research and Development, Elan. "Patient safety is our top priority. We remain strongly committed to defining TYSABRI's benefit-risk profile and determining the appropriate path forward."

SENTINEL is a two-year, randomized, multi-center, placebo-controlled, double-blind study of 1,171 AVONEX-treated patients in 123 clinical trial sites worldwide. In the trial, AVONEX-treated patients who continued to experience disease activity were randomized to add TYSABRI (n=589) or placebo (n=582) to their standard regimen.

The companies anticipate that two-year data from SENTINEL will be presented at the 21st Congress of the European Committee for Treatment and Research in Multiple Sclerosis (ECTRIMS) in Thessaloniki, Greece, which begins September 28, 2005.

About TYSABRI

Biogen Idec and Elan are collaborating equally on the development of TYSABRI in MS, Crohn's disease, and rheumatoid arthritis. On February 28, 2005, Biogen Idec and Elan announced that they voluntarily suspended TYSABRI from the U.S. market and all ongoing clinical trials. Worldwide regulatory agencies are being kept informed of developments related to TYSABRI.

Information about TYSABRI, including the voluntary suspension of marketing and US prescribing information, is available at 1-800-456-2255 and www.TYSABRI.com.

About Multiple Sclerosis

MS is a chronic disease of the central nervous system that affects approximately 400,000 people in North America and more than one million people worldwide. It is a disease that affects more women than men, with onset typically occurring between 20 and 40 years of age. Symptoms of MS may include vision problems, loss of balance, numbness, difficulty walking and paralysis.

About Biogen Idec

Biogen Idec creates new standards of care in oncology, neurology and immunology. As a global leader in the development, manufacturing, and commercialization of novel therapies, Biogen Idec transforms scientific discoveries into advances in human healthcare. For product labeling, press releases and additional information about the company, please visit http://www.biogenidec.com.

About Elan

Elan Corporation, plc is a neuroscience-based biotechnology company. We are committed to making a difference in the lives of patients and their families by dedicating ourselves to bringing innovations in science to fill significant unmet medical needs that continue to exist around the world. Elan shares trade on the New York, London and Dublin Stock Exchanges. For additional information about the company, please visit http://www.elan.com.

I'm hoping that ELN will move back up.
It seems that Tysabri is a drug that will benefit a lot of people, who doesn't really have much else to choose from.

Good pick.
Thank you.

Cheers!

[oicpecnoc]

David,

My best friend has MS, and we have a foundation that raises money for the MS Society.  I am no expert, and have no TA to add, but I thought I might add what I know for all to consider.

Elan and Biogen are partners.  Biogen was first to market with Avonex, and Elan partnered with the giant to gain market share quickly.  Biogen advocates the use of both.  Imagine that.  There have been multiple deaths of people in their studies due to PML.  The debate rages on as to cause and effect, but for sure if it comes back it will have a warning label, assuming nobody else dies from PML this week, which for sure is a possibility.  When people in their studies die, it gets hit pretty hard.  Even if it isn't fair, the market does not wait to listen to the facts, it just makes a judgement that "this cannot be good".

Having said that, Tysabri is the Babe Ruth of MS drugs.  It is impossible to ignore how much better the drug is than its competitors according to studies, other than when it kills you.  It can also not be understated how few cases of PML on a percentage basis have actually occured, not to mention  contributing factors other than the fact that those patients were taking Tysabri.  All that needs to be known is that you will probably talk to very few victims who suffer constant severe symtoms that will not salute the warning and move forward, such are the results the drug seems to produce.

The chart won't tell you if someone is going to die from PML tomorrow, but it will tell you there are a bunch of people who think it won't happen.  To me, this is a gamble on the label.  Will it read, this has a 1% chance of killing you, or a 25% chance of killling you.  This is of course an exaggeration, but the severity of the warning will have everything to due with the future success of Tysabri and Elan.  Dr.s won't be too anxious to prescribe a treatment with an intense warning.  Their premiums are high enough as they are.

[David Randolph]

Thanks a lot for your thoughts, they complement what I'm going to leave you, which is just the chart (I'm sorry but I run out of time before the opening bell and I still have to lunch - anyway, what's to see at the open, I'm not doing any buying or selling today anyway  )

[David Randolph]

Ok, I got my technical setup and trading plan on ELN, I hope the ascending triangle breaks to the upside.

[stocky]

Doubled my position on pull back.

[cumulina]

How badly is this going to affect ELN?

I do have an opinion on these kinds of actions, but I'll keep them to myself for right now 



Parker & Waichman, LLP Files Suit Against Biogen Idec, Inc. and Elan Corp. on Behalf of Family of Tysabri PML Victim
07/21/2005 09:43
NEW YORK, July 21, 2005 (PRIMEZONE) -- Parker & Waichman, LLP (www.yourlawyer.com) announces that it has filed a claim on behalf of the family of Mrs. Anita Smith against Biogen Idec, Inc. (Nasdaq: BIIB) and Elan Corp. (NYSE: ELN), the manufacturers of Tysabri (Natalizumab). Mrs. Smith died of Progressive Multifocal Leukoencephalopathy, or PML, a fatal disorder of the nervous system that has been linked to monotherapy with Tysabri and Tysabri in conjunction with Avonex (Interferon Beta-1a), another Biogen pharmaceutical. Tysabri, a powerful immunosuppressant, received fast track FDA approval in November 2004 for the treatment of Multiple Sclerosis (MS). Tysabri was voluntarily withdrawn from the market by its manufacturers on February 28, 2005, after two cases of PML were diagnosed. The suit was filed in Massachusetts Middlesex Superior Court on July 20, 2005.

According to the suit, Mrs. Smith's tragic death on February 24, 2005 was one of the two PML cases which precipitated Tysabri's withdrawal from the market. In April 2002, Mrs. Smith was enrolled in the Tysabri clinical trial studying the use of Tysabri in combination with Avonex, another Multiple Sclerosis drug manufactured by Biogen. The suit alleges that the combined administration of Tysabri and Avonex can increase the average concentration level of Tysabri by 86 percent over the levels of Tysabri in monotherapy. The suit also alleges that the combined use of these drugs increases Tysabri's half life, which reduces the ability of the patient to clear Tysabri from his/her system. These high levels of Tysabri retained in the body are associated with the development of PML.

The suit notes that in the FDA's review of Tysabri's Biologic License Application, which included data on the combination therapy of Tysabri and Avonex, the agency found that after the sixth dose, the rate of clearance of Tysabri decreased by 34 percent, and the half life increased by 70 percent as compared to the first dose. The data also showed that the mean maximum saturation of Tysabri was high throughout the duration of the study. The observations led the FDA to state that "Avonex alters the pharmacokinetics of natalizumab."

"Before Tysabri was approved, its manufacturers were aware that the drug's use, in combination therapy with Avonex, was dangerous," commented Jerrold S. Parker, founding partner of Parker & Waichman, LLP. "This blatant disregard for patient safety caused tremendous suffering for Mrs. Smith and her family. It certainly appears that combination therapy was proposed by Biogen in an effort to maintain the relevance of Avonex in the marketplace following Tysabri's introduction."

Parker & Waichman, LLP is a leading products liability and personal injury law firm that represents plaintiffs nationwide, with offices in New York and New Jersey. Parker & Waichman, LLP has assisted thousands of clients in receiving fair compensation for injuries resulting from defective medications and medical devices. For more information on Parker & Waichman, LLP please visit: (http://www.yourlawyer.com) or call 1-800-LAW-INFO (1-800-529-4636).

[sapphocles]

I'm a newbie when it comes to TA, but I've been following ELN for years.  Look for a big earnings surprise next week -- with all the attention on Tysabri, people consistently underestimate the value of the company as a drug delivery/nanotechnology play. Also, ELN and Biogen have said they'll complete safety review of Tysabri by end of summer, and CEO has never wavered from statement that the drug will be back on the market by Q3. Next few weeks and months should bring a huge stream of good news to go with the technicals you guys are seeing.

Sapphocles

P.S.  Cumuliina, the lawsuit PR is nothing to worry about -- just a final shakeout before earnings IMO.

[stocky]

So the earning is next week. hmmmm.... I'll look for exit [after being burned several time at ERs ]

[cumulina]

sapphocles ... You said:

"P.S.  Cumuliina, the lawsuit PR is nothing to worry about -- just a final shakeout before earnings IMO."

These kinds of lawsuits seems to be an American specialty...I remember one (Texas?) where a women won a lawsuit because she lost her psychic powers...after a hysterectomi! 

I hope that these "ambulance-chasers" are on the decline.
I don't know if the cited case will have any affect, but I hope not.
Lots of patients are hoping for Tysabri...

Pardon my bad english, I hope you understand what I want to say.

[David Randolph]

I was reading your posts on this thread again, very valuable information here.

As a speculator I need to have simple rules and trading plans to follow. I really love reading the news and knowing more about the companies I trade, but in the end discipline reigns supreme and discipline in my strategy comes from having and following a technical trading plan.

My trading plan on ELN is to hold the stock as this ascending triangle pattern evolves. If the stock closes below the ascending trendline I have to take a loss and move on. If the pattern resumes itself the technical target of the breakout will be something around $11.8. So, expected reward is 51% and expected risk is about 8%. If my win/loss ratio is around 50% I'll be a big winner over the long run.

All about probabilities ...

Have a nice trading day, all 15 holdings of the 3 Stocks on Fire Portfolio have seen their analysis updated.

[David Randolph]

The trading plan is set:

My trading plan on ELN is to hold the stock as this ascending triangle pattern evolves. If the stock closes below the ascending trendline I have to take a loss and move on. If the pattern resumes itself the technical target of the breakout will be something around $11.8. So, expected reward is 51% and expected risk is about 8%. If my win/loss ratio is around 50% I'll be a big winner over the long run.

Now the market has the word on the outcome.

[la-onda]

MAP Pharmaceuticals Announces Expanded Development Agreement with Elan Drug Technologies
Wednesday July 27, 7:30 am ET 
Proprietary Elan NanoCrystal(R) Technology to Be Applied to MAP's Novel Asthma Therapeutics


MOUNTAIN VIEW, Calif., July 27 /PRNewswire-FirstCall/ -- MAP Pharmaceuticals, Inc. announced today that MAP and Elan Corporation, plc (NYSE: ELN - News) have agreed to amend their previous agreement, signed in 2004, to seek to apply Elan's proprietary NanoCrystal® technology to defined inhalation therapies. MAP has been collaborating with Elan to develop a nebulized form of budesonide for the treatment of asthma. The agreement provides additional rights to MAP for the use of NanoCrystal technology for the treatment of multiple respiratory diseases, including asthma.
 



This agreement covers nebulized delivery of budesonide and combinations of budesonide with beta agonists. Budesonide is an anti-inflammatory corticosteroid indicated for the maintenance treatment of asthma as well as prophylactic therapy for this condition. In all delivery forms, including nebulized delivery, budesonide sales exceeded US$1bn worldwide in 2004. Asthma affects approximately 17 million Americans, 5 million of whom are children. The nebulized portion of the asthma market is the fastest growing segment, largely due to the increasingly high diagnosis rates for asthma in the pediatric population.

Timothy Nelson, CEO of MAP Pharmaceuticals said, "We are pleased to expand our collaboration with Elan Drug Technologies. As an emerging specialty pharmaceutical company focused on becoming a leader in the inhaled drug delivery and respiratory disease sector, these expanded rights allow us to more fully serve our physician and patient customers in the treatment of asthma and other respiratory diseases. The growth of nebulized steroids over the past few years has demonstrated a need among physicians and patients for this type of therapy for the treatment of asthma. We believe the potential to deliver nebulized budesonide to the patient faster and more efficiently will serve MAP and our customers well in the years to come."

The NanoCrystal technology to be used in the development of the new formulation of budesonide is a proprietary Elan innovation for poorly water soluble compounds. NanoCrystal technology is designed to enhance the clinical performance of poorly water-soluble drugs by transforming them into nanometer- sized particles. It is anticipated that the budesonide formulation utilizing this technology may result in a product that will have a superior pharmaceutical delivery and clinical profile when administered via nebulizer.

Paul Breen, Executive Vice President, Elan Drug Technologies said, "We are very pleased to expand this development program with MAP Pharmaceuticals. This program, which will involve the application of the technology into a nebulized form, highlights the flexibility of the technology. We look forward to working closely with MAP in applying our technology to new dosage forms in the inhalation area."