These are three very important letters to Biogen Idec: PML. PML, or progressive multifocal leukoencephalopathy, is the rare brain infection that got one of Biogen's blockbuster multiple sclerosis drugs, Tysabri, pulled from the market in 2005.

A Biogen Idec lab technician Suzanne Kreiter | The Boston Globe | Getty Images

The Food and Drug Administration allowed Tysabri back on the market the following year, with additional safety monitoring, at the urging of patients. It now draws more than $1.5 billion in annual sales for the Cambridge, Massachusetts-based company. PML is still a feared side effect, though the company has taken additional measures to mitigate its risk.

Biogen confirmed Wednesday that it's seen its first case of PML in a patient taking Tecfidera, its new pill for multiple sclerosis that's already drawing more quarterly revenue than Tysabri or former top-seller Avonex, also for MS. Read MoreWhen unapproved drugs are the only hope

Biogen shares, already down on an earnings report that included a slight missing of expectations for Tecfidera, sank further, and were down about 8 percent mid-morning. "We have confirmed a case of PML in a patient being treated with Tecfidera, who recently died from complications of pneumonia," Biogen Chief Executive Officer George Scangos told analysts and investors on the company's earnings call. "Despite this tragic loss, we believe that the overall positive benefit/risk profile of Tecfidera remains unchanged."

The patient, Scangos said, had been taking Tecfidera as part of a clinical trial for 4 1/2 years. For 3 1/2 of them, the patient had severe lymphopenia, or low white blood cell counts. Tecfidera's label contains a warning for lymphopenia, Scangos said. It's also a known risk factor for PML. "We have reported the case to the relevant regulatory authorities and will work with them to confirm that the language in our label provides patients and their physicians appropriate information regarding lymphopenia," Scangos said. In response to one of many questions on the call about the case, Scangos noted the patient hadn't previously taken Tysabri. Read MoreWill focusing on drug prices reign in costs? Analysts warned the market may be overreacting to the news. "We do not believe the emergence of a PML case, even in a patient not previously on Tysabri, is a huge surprise nor should it substantially change Tecfidera use or adoption patterns," Wells Fargo's Brian Abrahams wrote in a research note Wednesday. He said that Biogen had told him the patient's physician had elected to keep the patient on the drug; the patient died earlier this month.

