Irish Stocks Tumble Most Since 1987; Elan Shares Lead Slide

By Adam Haigh

Aug. 1 (Bloomberg) -- Ireland's ISEQ Index tumbled the most in two decades, led by Elan Corp., the country's biggest drugmaker, after confirmation of two new cases of a deadly brain infection in patients taking the multiple sclerosis drug Tysabri.

``It's pulled down the whole ISEQ,'' Goodbody Stockbrokers analyst Killian Murphy said in an interview. ``Sentiment's gone a bit negative.''

Ireland's ISEQ Index decreased as much as 9.5 percent, to 3,958.59, the biggest drop since October 1987 and the first time since April 2003 that the measure slid below 4,000. The index traded at 4,063.78, a decline of 7.1 percent, at 10:43 a.m. in Dublin, the biggest retreat in almost 11 years and the steepest drop today among stock indexes tracked by Bloomberg.

Ireland's ISEQ index, Europe's third worst performing benchmark this year after Ukraine and Bulgaria, is heading for a second consecutive annual decline in 2008.

After a more than decade-long boom spurred by exports, consumer spending and homebuilding, Ireland's economy may be heading for its weakest performance in almost a quarter century, according to government forecasts.

Elan, which accounts for 5.7 percent of the ISEQ index's weighting, plunged 7.70 euros, or 63 percent, to 5.80 euros in Dublin. The two Tysabri cases, from the European Union, were the first since the drug was reintroduced in the U.S. in 2006. The cases of the disease, progressive multifocal leukoencephalopathy, were confirmed this week, Biogen Idec Inc. reported yesterday in a regulatory filing.

Earlier this week Elan shares slumped after its experimental treatment for Alzheimer's disease, bapineuzumab, was linked in a study to a brain-swelling side effect. The stock is down 73 percent so far this week.

``You are potentially on the edge of a precipice here'' for the company, Canaccord Adams analyst Karl Keegan said in a telephone interview. ``Last night's news also hits future growth opportunities for Elan.''

Anglo Irish Bank Plc fell 11.1 cents, or 2.2 percent, to 5.009 euros, bringing its decline this year to 54 percent.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net