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Biogen Idec’s Problems Mount

Biogen Idec Inc.’s troubles keep growing.

After withdrawing its multiple sclerosis drug following the death of a patient in clinical trials, drug makers Biogen Idec and Elan Corp. confirmed today the death of a second patient.

Cambridge, Mass.-based Biogen Idec, the third largest biotechnology firm in the United States, which has a large presence in San Diego, halted sales and clinical trials of Tysabri on Feb. 28 after it was confirmed that patients developed a rare disease of the central nervous system.

Biogen Idec’s stock plunged to $38.65 on Feb. 28 from $67.28.

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Today’s news sent the stock down an additional 4.58 percent to $37.53.

Some industry insiders expressed doubt that the drug will be able to return to market.

After the death of the first patient, Elan’s chief executive, Kelly Martin, said he hoped to remarket the drug in several months.

In a written statement today, Biogen Idec and Irish drug maker Elan said “they will work with clinical investigators to evaluate Tysabri-treated patients and consult with leading experts to better understand the possible risk of progressive multifocal leukoencephalopathy,” a rare but often fatal disease.

Meanwhile, the Securities and Exchange Commission is preparing to interview executives who made $10.7 million on stock sales before the companies pulled Tysabri from the market, according to published reports.

On Feb. 18, Biogen Idec general counsel Thomas Bucknum made $1.9 million exercising options and selling stock.

On Feb. 17, Biogen Idec Chairman William Rastetter made $7.7 million.

Its director, Robert Pangia, made $951,616, and human resources executive vice president, Craig Eric Schneier, made $102,000.

A company spokesman could not be reached in time today to provide comment.

But according to published reports, the company claimed no wrongdoing.

In recent days, Biogen Idec has been slapped with several class-action lawsuits alleging that the firm concealed vital information on Tysabri to reap financial benefits.

On March 2, Radnor, Pa.-based law firm Schiffrin & Barroway, LLP said it filed a suit in the U.S. District Court for the District of Massachusetts on behalf of shareholders who bought Biogen Idec stock between Feb. 18 when the firm said it first learned about Tysabri’s problem and Feb. 25.

The suit charges Rastetter and James Mullen, the chief executive of Biogen Idec, with concealing negative information on the drug in order to win fast-track approval for Tysabri from the Food and Drug Administration.

The approval was granted in November.

The news could also potentially affect some 500 employees working at Biogen Idec’s manufacturing plant in Oceanside.

Tysabri was slated to be the first drug to be made at the $400 million plant starting this year on a small scale, with full production starting in 2006.

Jose Juves, a Biogen Idec spokesman, said on Feb. 28 that “It’s premature to gauge the impact on operations (in Oceanside).”

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