Elan said yesterday that the Securities and Exchange Commission (SEC) has been conducting an informal inquiry into trading in its shares around the time it moved to suspend sales of its multiple sclerosis treatment, Tysabri, at the end of February.

In its annual report, published yesterday, Elan said it had received a letter from the US financial watchdog's division of enforcement about the inquiry last month.

An Elan spokeswoman said the company was co-operating fully with the SEC in "this informal and routine inquiry". The SEC is also looking at trading in the shares of Biogen Idec, Elan's partner in the development of Tysabri.

Analysts said that such an inquiry was standard procedure when share price movements of the scale that occurred in the wake of the Tysabri suspension took place. Elan's shares fell by 70 per cent on the day of the announcement.

They also noted that no trading by Elan executives had taken place in the days ahead of the announcement.

In March, Biogen said that its chief counsel, Thomas Bucknum, had resigned, just over a week after regulatory filings revealed that he had reaped a windfall profit from selling Biogen shares just before disclosure of the Tysabri suspension.

The annual report also shows that Elan chief executive Kelly Martin was paid $858,242 (€660,950) last year, down from $1.58 million a year earlier.

The drop in pay was due to Mr Martin's decision to waive his cash bonus last year. Instead, he was granted 200,000 stock options, valued at $900,000 and exercisable at $7.47, in March. With the share price trading well below this level, these options are currently worthless.

The report also sets out the risk factors facing the company. It warns that failure to reintroduce Tysabri to the market, or a substantial delay in such a reintroduction, would have a material effect on the company.

Elan also warned that it had substantial future cash needs, noting that at the end of last year it had $2.23 billion of debt against cash of around $1.54 billion.

Meanwhile, Elan is due to present data from its two-year trial of Tysabri in the treatment of multiple sclerosis at a conference in the US today.

The company is expected to present the trial results at an American Academy of Neurologists meeting in Miami but, given the problems surrounding the drug, the results are unlikely to have the impact they might once have had.