J.P. Morgan Securities upgraded shares of Biogen Idec (nasdaq: BIIB – news – people ) to “overweight” from “neutral” and said the odds are high the company’s multiple sclerosis drug will return to the market before then end of 2006, based on discussions with neurologists.

“We think uptake could be more significant than the Street is currently anticipating,” said analyst Ronald Renaud, in a note to investors. “While PML [progressive multifocal leukoencephalopathy] concerns are legitimate, we believe many neurologists will accept the risk/benefit tradeoff and adoption rates could exceed expectations.”

Tysabri, co-marketed with Ireland’s Elan (nyse: ELN – news – people ), was pulled from the market last February. The analyst said a J.P. Morgan survey indicated neurologists would place 14% of their patients on Tysabri within two years of a re-launch and almost 25% of patients “would have no hesitation using Tysabri.”

The J.P. Morgan analyst said investors are not looking beyond the earlier failure of Tysabri and noted the company’s core Avonex business is “still a very strong cash-flow generator.” In addition, the company’s alliances with Genentech (nyse: DNA – news – people ) and Protein Design Labs (nasdaq: PDLI – news – people ) bode well for the future.

“If Tysabri can return to the market–and we think it will–that could represent significant valuation upside,” said Renaud. “At 19 times our 2006 earnings-per-share forecast of $2.12, we believe the current valuation represents an attractive entry point to own a leading biotech ahead of a high likelihood of positive news flow over the next 12 months.”