Gilenia, a drug used to treat multiple sclerosis, was approved unanimously yesterday by the Food and Drug Administration drugs advisory committee as part of the process that will see the drug eventually reach the market in the US and worldwide.

While the approval was expected, the committee unexpectedly approved the drug as a potential first-line therapy, adding to the competition for Elan's Tysabri. Gilenia is made by Swiss company Novartis.

Bloxham stockbrokers were pessimistic about Tysabri's future. "With Tysabri revenues already slowing in recent months, this announcement will do little to boost investor sentiment in the stock and will lead to further cuts in projected future Tysabri revenues."

Ian Hunter at Goodbody said up to 10pc of patients now on Tysabri may switch to Gilenia. "But we believe that Tysabri's undoubtedly superior efficacy will continue to attract patients when they experience disease breakthrough over time on other MS drugs, including Gilenia," he said.