In consultation with FDA, Biogen Idec and partner Elan are suspending marketing of multiple sclerosis (MS) treatment Tysabri (natalizumab), halting clinical trial use, and alerting doctors to stop using the drug.

On the day of the suspension announcement, Elan's stock price plunged 70% and Biogen's dropped 43%. Stock prices rose at Serono, Schering AG, and Teva, companies with competing drugs. "We have seen a safety signal; we are going to be prudent and take a step back," said Biogen CEO James C. Mullen in a conference call following the recall announcement.

Two adverse events triggered the suspension. One patient died, and another has fallen ill in one confirmed and one suspected case of a neurological ailment called progressive multifocal leukoencephalopathy (PML). Both patients were taking Tysabri in combination with Avonex (interferon ß-1a), which is another Biogen MS drug, for more than two years.

Biogen states that there have been no reports of PML in patients receiving Tysabri or Avonex alone. The health of all 3,000 participants in trials of Tysabri for MS, Crohn's disease, and rheumatoid arthritis is under review.

Tysabri is a humanized monoclonal antibody, bioengineered from a part of a mouse antibody. MS patients' immune systems attack their own bodies, in particular, the protective sheath around nerves. As part of the drug's accelerated approval last November, Biogen had agreed to continue its clinical trials for another year.

Elan, which had been close to bankruptcy and was restructuring, was hoping to narrow its losses with Tysabri. Biogen, too, was counting on the drug for growth. Both companies say they want to get Tysabri back on the market, but analysts forecast grim sales prospects if they do.