Analyst Deborah Knobelman says she is downgrading Elan to market perform from outperform.
She believes the newly diagnosed case of PML (progressive ultifocal leukoencephalopathy) in a patient on Tysabri monotherapy adds a new level of risk to the possibility of Tysabri ever returning to market. She notes this is the third reported case of PML in a patient on Tysabri monotherapy.
Knobleman says she no longer feels comfortable recommending Elan shares, even for the most risk-tolerant investor. She maintains her earnings assumptions for Elan, as she had previously removed Tysabri from her model.