Acorda shares soar after FDA panel backs MS drug

NEW YORK (Reuters) - Acorda Therapeutics Inc (ACOR.O) shares soared nearly 50 percent on Thursday as analysts said a U.S. Food and Drug Administration panel review of the company's multiple sclerosis drug paved the way for approval by next year.

The FDA panel on Wednesday backed the drug, which is known chemically as fampridine and is aimed at improving the mobility of multiple sclerosis sufferers.

The panel review stood in contrast to a more negative analysis by FDA staff a few days earlier that sent the company's shares down sharply, analysts said.

"In my view, the briefing documents were a total red herring to investors, most of whom sold positions heavily," said Hapoalim Securities analyst Raghuram Selvaraju. "This morning, what you're seeing is the about-face that I would have expected."

Shares of Acorda jumped to $25.07 in afternoon trading on Nasdaq after being halted on Wednesday for the daylong panel review. They had closed at $16.74 on Tuesday.

The panel of outside experts voted that fampridine was safe and effective. But it said fampridine should not be used in people with known seizure problems. The panel also said lower doses should be studied, but that could wait until after approval.

The agency is due to decide whether to approve the drug on October 22. But some analysts said approval would probably be delayed until the first half of 2010 to prepare a program to manage fampridine's risks.

"We do expect a modest delay beyond the October 22 (deadline), but this is also in Street expectations," JPMorgan analyst Geoffrey Meacham said in a research note. "We would recommend investors buy ACOR shares following this panel, where we expect continued upward momentum into the likely approval and launch."

Selvaraju projects annual sales of fampridine reaching $900 million by 2017, putting it near the $1 billion threshold for a drug to be deemed a blockbuster.

The positive panel ruling also raised the profile of Acorda as a possible acquisition candidate. With Thursday's share price spike, the company had a market value of nearly $1 billion.

Aside from Biogen Idec (BIIB.O), which holds fampridine rights outside the United States, Selvaraju said other companies in the multiple sclerosis area could be potential acquirers.

They include Teva Pharmaceutical Industries (TEVA.TA), Novartis (NOVN.VX), Merck KGaA (MRCG.DE) and Sanofi Aventis (SASY.PA), which is developing a drug that is similar to fampridine, but further behind in development, Selvaraju said.

"I think they're an extremely eminent takeover target," Selvaraju said. "I think any company that either has a foothold in the MS space or wants to have one should be very interested in this company."

An Acorda spokesman said the company does not comment on speculation.

(Reporting by Lewis Krauskopf; Editing by Dave Zimmerman, Lisa Von Ahn and Gunna Dickson)