* European regulators to review risk, benefit of Tysabri

* Review follows reports of 23 cases of PML worldwide

* Shares of Biogen down 7 pct; Elan shares off 17 pct (Add FDA confirming 23 cases)

By Toni Clarke

BOSTON, Oct 23 (Reuters) - European regulators said they have begun a review of the multiple sclerosis drug Tysabri after reports of 23 cases of a potentially deadly brain infection.

Tysabri, made by U.S. biotechnology company Biogen Idec Inc (BIIB.O: Quote, Profile, Research) and Ireland's Elan Corp Plc (ELN.I: Quote, Profile, Research), was temporarily withdrawn from the market in 2005 after being linked with progressive multifocal leukoencephalopathy, or PML. It was reintroduced in July 2006 with stricter safety warnings.

Tysabri is considered the most important driver of growth for both companies. Shares of Biogen fell 7.2 percent to close at $43.81 on Nasdaq. Elan shares dropped nearly 17.6 percent to close at $5.31 on the New York Stock Exchange.

The U.S. Food and Drug Administration confirmed there had been 23 confirmed PML cases since 2006. In September, the FDA said it had confirmed 13 cases.

"These new cases are likely to alarm physicians whose comfort with the product had been increasing in recent months," said Sanford Bernstein analyst Geoffrey Porges.