Elan Gets a Vote of Confidence

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Yesterday Elan (NYSE: ELN) and partner Biogen Idec (Nasdaq: BIIB) got an unexpected boost, when an FDA advisory panel recommended that its lead drug Tysabri be approved to treat Crohn's disease.

In a positive 12-3 vote (with two abstaining), the advisory committee recommended that the FDA approve the use of Tysabri as a treatment for Crohn's disease sufferers who aren't responding to other therapies like steroid treatment, or possibly biologics such as Johnson and Johnson's (NYSE: JNJ) Remicade or Abbott's (NYSE: ABT) Humira.

Considering the recent negative regulatory decision on the use of Tysabri for Crohn's in the European Union, and some of the concerns raised in briefing documents released just before the advisory committee meeting, I was surprised that the panel vote was so positive in favor of Tysabri.

It's important to remember that the FDA doesn't always follow the advice of its advisory panels. For example, earlier in the year Dendreon's (Nasdaq: DNDN) prostate cancer compound received an approvable letter despite a positive advisory panel vote.

It's still too early to know whether this panel vote was as positive as the vote indicates, since the FDA has not yet posted a transcript of the meeting on its website. Nonetheless, gaining regulatory approval in the coming months to treat Crohn's disease should provide some modest upside to the 20,000 patients on Tysabri expected by the end of the year.

Johnson and Johnson is an Income Investor selection, and Biogen Idec is a Stock Advisor recommendation.

Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.