Elan dropped more than 20%, to $16 ( 11.73 in Dublin), in a single day following the news that the US Food and Drug Administration (FDA) had given its approval for Tysabri to return to market.

That brings the shares right back to the level they were trading at this time last month. At that time, the stock was beginning to gather momentum in the wake of a positive set of first quarter figures and a strong feeling that the FDA would give Tysabri the thumbs-up.

In all probability, last week's fall is partly attributable to profit-taking. Elan's good news was also lost amid the sell-off that wiped nearly 4bn off the value of Iseq constituents last week.

In the cold light of day, Tysabri's re-emergence is the best result that Elan could have hoped. The drug is only the second in FDA history to regain approval in the US having been withdrawn.

The conditions attached by the regulator to its re-sale were also relatively benign, as had been predicted in many quarters in recent months.

Elan has to attach a label to the product advising that the treatment is "generally recommended" for patients who have failed to respond to other medication.

NCB analyst Orla Hartford said investors should not assume, as some commentators have in recent days, that that warning precludes the use of Tysabri as a frontline treatment for newly-diagnosed MS sufferers. "The option is there now, if patients want it, " she said.

That will be the key determinant of Tysabri's success. It is impossible to gauge the extent to which demand will have suffered because of the drug's suspension from the market and the two patient deaths that led to its withdrawal.

In a conference call with analysts last week, Elan and Biogen, joint venture partners on Tysabri, outlined what they call "Touch", the strategy for managing the risks associated with the drug. The firms will provide training and educational materials to doctors relating to Tysabri, appraise patients fully of the potential side effects and collate data to check for early symptoms of PML, the progressive neurological disease condition that led to the previous patient deaths.

In a detailed research report on Tysabri, Piper Jaffray analyst Deborah Knobelman said she believes Touch will be difficult to manage and will delay the roll-out of the drug. Training and educational materials are not yet all finalised with the FDA.

Elan/Biogen hopes to begin external training in July and will attempt to reach out to 2,000 infusion sites and 12 specialty pharmacy distributors. "It will likely take several weeks to get the sites trained and authorised, " according to Knobelman.

She also believes that the pricing model for Tysabri will change. "Elan/Biogen did not provide clarity on the potential new price, but we expect it to go up, " she said, in light of the restrictive labelling and what is likely to be a smaller addressable market than on its initial launch in 2004.

Accordingly, Piper Jaffray maintains its "underperform" recommendation and a $14 price target that envisages Elan shedding a further 12.5%, even with Tysabri back on the market.

Davy Stockbrokers' analyst Jack Gorman is more bullish.

He sticks by his previous forecasts that Tysabri will have a target market of between 450,000 and 500,000 patients worldwide, and will generate revenue of $1.8bn by 2010.

Davy, the pharmaceutical company's house broker, also has confidence in Elan's Alzheimers programme. An Alzheimers drug is currently in Phase II clinical trials in the US, Phase III being the last stage before the company seeks approval to go to market.

Between Tysabri and the Alzheimers treatment, Gorman feels an $18 price target is justified. NCB, meanwhile, puts a value of up to $5.50 per share on the various Alzheimers projects Elan has in its pipeline. The firm is conducting pioneering research in this area, which involves a new approach to treating the condition based on "monoclonal antibodies".

If Elan were to gain approval for the drug, currently in Phase II trials, Hartford said, that could pave the way for at least two other Alzheimers drugs the company is working on. "You could have up to three products in the clinic [undergoing trials] in 2007, for Alzheimers.

That will provide encouragement to weather-beaten Elan shareholders who have had to batten down the hatches to endure a series of storms over the last five years. With a fair wind behind it, Tysabri could help usher in better weather.

Investors will hope the Alzheimers treatments have a much smoother path to market, should they progress that far. If they do the rewards are likely to be significant.

As is always the case with drugs research, and with Elan, in particular, many unforeseen hurdles may yet appear in the road, making the shares a very speculative buy at best.