Drugmakers Biogen Idec and Elan Corp. Plc on Monday suspended sales of their much-heralded new multiple sclerosis drug Tysabri after a patient died from a rare and often fatal central nervous system disease.

Shares of Elan fell 57 percent in early trading while Biogen Idec’s shares fell 40 percent.

The companies based their decision on one confirmed, fatal case of the condition, known as progressive multifocal leukoencephalopathy, and one suspected case of the condition. The company has also suspended dosing in all clinical trials of the drug.

The drug, which was approved last November, was widely expected to become the world’s leading multiple sclerosis treatment and the driving force behind a revitalization of Elan and a new growth spurt for Biogen Idec, whose existing multiple sclerosis drug, Avonex, faces increased competition.

“If the drug comes back it will have a huge safety cloud over it and will require a set of investigations of all patients pre-and post marketing approval,” said Geoff Porges, an analyst with Bernstein & Co. “That is likely to take months, not days or weeks.”

The patients cited by the companies were taking both Tysabri and Avonex. Biogen Idec had hoped patients would get an extra benefit by taking both drugs.

“The largest blow is, of course, for Elan, as they came back sharply on Tysabri after all the setbacks in recent years,” said Bob Pooler, an analyst at Swiss brokerage Lombard Odier Darier Hentsch.

Elan said it is likely to make adjustments to its 2005 forecasts within the next 10 days.

Multiple sclerosis, an autoimmune disorder that targets the central nervous system, is a devastating disease that can cause blurred vision, weakness, poor muscle coordination and loss of memory and other mental functions. It affects about 400,000 Americans, according to the National Institutes of Health.

Elan shares fell to $11.60 on the Inet electronic brokerage network after closing Friday at $26.90 on the New York Stock Exchange. Biogen Idec’s shares fell 40 percent to $40.31 from a close on Nasdaq of $67.28.

Shares of the Swiss biotechnology company Serono SA (SEO.VX: Quote, Profile, Research) , whose Rebif drug had been threatened by Tysabri, rose 17 percent to 837 Swiss francs, while Germany’s Schering AG (SCHG.DE: Quote, Profile, Research) , which makes another rival product, rose 5.1 percent to 56.40 euros.

Shares of Teva Pharmaceutical Industries Ltd. (TEVA.O: Quote, Profile, Research) , which markets the multiple sclerosis drug Copaxone, rose 8.6 percent to $29.94 on Inet from a close of $27.56 Friday.