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From Cinderella story, to heartache, to back on the market, back to side-effect disaster, it's been one wild ride for multiple sclerosis drug Tysabri and the stocks of its owners, Biogen Idec (Nasdaq: BIIB  ) and Elan (NYSE: ELN  ) . But things might actually be settling down after the FDA agreed with the companies on a strategy to manage the side-effect risk for Tysabri.

The drug increases the risk of developing progressive multifocal leukoencephalopathy, or PML, a serious brain infection. The infection is caused by the usually relatively harmless JC virus, which the immune system usually takes care of. Tysabri weakens the immune system -- multiple sclerosis is essentially the immune system attacking body's nervous system -- but in the process of trying to control the immune system, Tysabri can potentially allow infections to occur.

Just "potentially" because not everyone has the JC virus floating around their bloodstream, waiting for their host to take an immune-system weakening drug before launching its attack. And no virus means no PML.

The inclusion of the JC virus status as a risk factor for Tysabri patients developing PML is good news for Quest Diagnostics (NYSE: DGX  ) which got its test for the virus approved in conjunction with the label change, but Biogen and Elan are the real beneficiaries. Somewhere between 40% and 50% of patients haven't been exposed to the JC virus and therefore can take Tysabri with substantially less risk of developing PML. (There's still risk that they could be infected while taking Tysabri or that the test isn't 100% accurate, but those issues can be managed somewhat with repeated testing).

Tysabri is arguably the best drug available to treat multiple sclerosis, but many of the JC-virus-negative patients haven't taken the drug for fear of the chance of developing PML, however small it may be. With the ability to determine the risk, patients who don't have the virus are more likely to switch from Teva Pharmaceuticals' (Nasdaq: TEVA  ) Copaxone, Rebif from Merck KGaA and Pfizer (NYSE: PFE  ) , and other inferior multiple sclerosis drugs. A positive test result will probably cause some patients to stop taking Tysabri, and not every JC-virus-negative patient will switch to Tysabri, but the availability of the test should be a net positive for Tysabri and an net negative for the other multiple sclerosis drugs.

Tysabri and the JC virus test are just the sort of innovative thinking the analysts on the Fool's Rule Breakers newsletter look for. See what they think is the next rule-breaking multibagger. Grab a copy of their free report by clicking here.

Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Teva Pharmaceutical Industries. Motley Fool newsletter services have recommended buying shares of Quest Diagnostics, Teva Pharmaceutical Industries, Pfizer, and Elan. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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