UPDATE 2-FDA OKs Clinical Data's antidepressant,investors happy

Mon Jan 24, 2011 2:02pm EST

* Shares up 69 pct, above 3-year high

* FDA nod for 10 mg, 20 mg, 40 mg for MDD

* Co says in talks to find a partner (Adds analyst comments; updates share movement)

By Shravya Jain

BANGALORE, Jan 24 (Reuters) - Shares of Clinical Data Inc CLDA.O jumped as much as 69 percent on Monday after the company's potential blockbuster antidepressant Viibryd received U.S. health regulators' nod on Friday and the company hinted at the possibility of being bought over.

"We will continue to explore the possibility of obtaining a change of control transaction that is acceptable to our board of directors and shareholders," Chief Executive Andrew Fromkin said on a conference call with analysts.

The company has had discussions with many parties over the last few months, Fromkin said.

Analysts said pharma companies like Eli Lilly & Co (LLY.N), Forest Laboratories Inc FRX.N or GlaxoSmithKline (GSK.L) could be interested in partnering Viibryd, looking to plug gaps in their pipeline or prepare for impending patent cliffs.

According to BMO Capital Markets analyst Robert Hazlett, the same companies could also be interested in buying Clinical Data -- a real possibility in the near future.

"When the company is also that open in saying there might be change of control, I'd pay attention and I think investors should as well," Hazlett said.

Buying the company makes sense as its $450.2 million market cap is "not terribly onerous" for a larger pharma, Hazlett said.

Clinical Data has a stress reliever Stedivaze in late-stage trials. Others in the pipeline are in early stages of development.

The company also said European approval process of the drug would depend on outcome of the partnering discussions.

U.S. patent for Vilazodone, the compound that will be sold under the brand Viibryd, will expire in June 2022. The European patent will expire in May 2022. [ID:nSGE6AF0HI]

The Newton, Massachusetts-based biotech and diagnostics testing firm said it expects to make the oral drug available in the United States by the second quarter of this year.

Analysts expect the drug's unique dual mechanism of action to differentiate itself from existing and upcoming treatments.

"Its safety profile will make it a likely choice for those with sexual side effects," Piper Jaffray analyst Edward Tenthoff wrote in a note.

BMO analyst Hazlett expects the drug to grab more than three percent of all anti-depressant prescriptions at peak at the end of the decade.

Roth Capital Partners analyst Andrew Vaino, however, said Viibryd could capture 10 percent of the approximately $11 billion anti-depressant market.

Clinical Data's shares were up 61 percent at $24.21 in afternoon trade on Monday on Nasdaq. They reached a three year high of $25.35 earlier in the session. (Additional reporting by Anand Basu; Editing by Maju Samuel, Sriraj Kalluvila)

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