Cumulative Abnormal Returns On February 28, 2005, Elan (ELN) and Biogen Idec (BIIB) suspended sales and clinical trials of their multiple sclerosis drug Tysabri because of a patient fatality. The decision to pull the drug was based on the fatality, and one other suspected case of a rare and often fatal disease of the central nervous system. According to the companies, both patients had received more than two years of Tysabri therapy plus the Biogen drug Avonex. Go to finance.yahoo.com and find the historical stock prices for each company 15 days before and 15 days after February 28, 2005. Construct the cumulative abnormal return for each company compared to the S&P 500 Index. Did each company's stock fall by the same percentage? How can you explain this? What does the trading volume look like for each stock over this same period?
