* EU agency recommends conditional approval for Fampyra
* Decision reverses earlier rejection of drug
* Approval will trigger $25 mln payment to Acorda
* Acorda shares jump as much as 21 percent
(Adds analyst comment, details throughout)
By Toni Clarke
BOSTON, May 20 In a surprise reversal, European
regulators have recommended approving Acorda Therapeutics Inc's
(ACOR.O) drug Fampyra, sending the company's shares up as much
as 21 percent.
Fampyra is designed to improve the walking ability of
patients with multiple sclerosis.
The European Medicines Agency, which advises the European
Commission on whether to approve new drugs, said in a statement
it has recommended giving the drug conditional approval.
U.S. biotechnology company Biogen Idec Inc (BIIB.O)
acquired European rights to the drug, known as Ampyra in the
United States, in 2009 and is in charge of commercialization
and marketing it in Europe.
Conditional approval means Biogen can start selling the
product once it is formally approved -- expected within 67 days
-- but the company will have to provide additional information
once it is on the market. If and when all the conditions are
met, it will receive full approval.
"This is a major milestone for the company," said Ron
Cohen, Acorda's chief executive, in an interview.
Shares of Acorda were up 15.5 percent at $30.84 in midday
trading on Nasdaq. Earlier in the day they rose as high $32.20.
Shares of much bigger Biogen rose 1 percent to $97.71. Fampyra
is a relatively small drug in Biogen's overall portfolio of
drugs, which include the MS drugs Tysabri and Avonex.
Ampyra was approved in the United States in January, 2010,
but in January this year, European advisers rejected the drug,
saying they were not convinced it conferred a clinically
meaningful benefit. Biogen appealed the decision.
"This is a definite surprise," said Geoff Meacham, an
analyst at J.P. Morgan. "We estimate Fampyra sales could
contribute about $40 million in revenues booked by Acorda in
Analysts currently see Fampyra/Ampyra reaching total sales
of around $600 million by 2015, according to Thomson Reuters
Pharma consensus forecasts.
Under terms of their agreement, Biogen paid $110 million
upfront for the European rights to the product, and agreed to
pay up to $400 million more in milestone payments. Acorda will
also receive a double-digit percentage royalty. Approval in
Europe triggers a $25 million milestone payment to Acorda.
SECOND PIECE OF GOOD NEWS
The European decision is the second piece of good news
Acorda has received on the drug recently. In April, the stock
jumped 27 percent amid optimism the company will be granted a
patent extension on Ampyra, potentially pushing out generic
competition beyond 2024.
Acorda's shares had fallen nearly 30 percent from their
year high last June. Some investors have grown concerned sales
of its key medicine have flattened.
Cohen said that the flattening of prescriptions reflected
the fact that when the drug was first approved, a large number
of patients -- some 40,000 -- rushed to try it. Inevitably, the
product did not work for everyone and a proportion of people
stopped taking it.
Now the company is optimistic it can increase sales by
marketing the drug for a wider group of patients -- those whose
walking ability has not deteriorated as much as those who
initially took the drug.
"Data show that the most mildly affected patients did at
least as well as the more severely affected." Cohen said. "Even
if you are just beginning to have impairment in your walking
abilities you can benefit."
Irish drugmaker Elan Corp Plc ELN.I, which manufactures
the drug, is entitled to 7 percent of the milestone payments
Acorda receives from Biogen. It also receives an 18 percent
royalty on global net sales.
Elan's shares rose 1.8 percent in Ireland.
European regulators also recommended approval of Amgen
Inc's (AMGN.O) bone drug Xgeva, for preventing fractures and
other skeletal problems in cancer patients. And Merck & Co
(MRK.N) won approval for its new hepatitis C drug Victrelis.
(Editing by Ben Hirschler, Dave Zimmerman)