UPDATE 1-Biogen, Elan seek okay for first-line Tysabri use in MS

(Adds analyst comment, background)

* Firms hope new test will pave way for wider use of drug

* Tysabri highly effective but PML risk has curbed uptake

LONDON, Jan 16 (Reuters) - Biogen Idec (NasdaqGS: BIIB - news) and Elan have filed for approval to sell their drug Tysabri as a first-line treatment for multiple sclerosis, a move that could boost sales of the drug.

Demand for Tysabri has been curtailed due to concerns over its association with a potentially fatal infection known as progressive multifocal leukoencephalopathy, or PML, which is caused by the JC virus.

Now (Other OTC: NWPN - news) , however, there is a test for the virus to predict if patients are at risk of developing PML, opening the possibility that Tysabri could be used more widely and at an earlier stage of treatment.

Biogen and Elan said on Wednesday they had submitted applications to the U.S. Food and Drug Administration and the European Medicines Agency seeking approval for first-line use in patients with relapsing forms of multiple sclerosis (MS) who have tested negative for antibodies to the JC virus.

The JC virus is generally harmless, but in people with weakened immune systems, such as those using immune system-suppressing drugs like Tysabri, it can lead to an increased chance of developing PML.

Tysabri use is currently limited to between 10 and 12 percent of treated MS patients, due to the risk of PML, and analysts said the hoped-for wider approval would improve uptake and send a positive signal to doctors.

Berenberg analysts said Tysabri's share of the MS market could increase to about 15 percent by 2015, representing sales of $2.9 billion, while today's share price for Elan implied peak sales of only some $2 billion.

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UPDATE 1-Biogen, Elan seek okay for first-line Tysabri use in MS