UPDATE 3-Biogen gains rights outside U.S. to Acorda MS drug

* Biogen gains overseas rights to Fampridine-SR

* Biogen makes up-front payment of $110 mln

* Acorda shares fall 12 pct; Biogen up 2.55 pct (Adds analyst comment and byline; updates share prices)

By Toni Clarke

BOSTON, July 1 (Reuters) - Biogen Idec Inc (BIIB.O) has acquired certain rights to an experimental multiple sclerosis drug made by Acorda Therapeutics Inc (ACOR.O), disappointing investors who had hoped Acorda would be acquired.

Acorda shares fell 12 percent in mid-morning trading, while Biogen rose 2.55 percent.

Cambridge, Massachusetts-based Biogen, which makes the MS drugs Avonex and Tysabri, will pay Acorda $110 million up front for rights to Fampridine-SR outside the United States, the companies said on Wednesday.

Hawthorne, New York-based Acorda could receive up to $400 million more if the drug meets certain regulatory and sales milestones. It will also receive tiered, double-digit royalties on non-U.S. sales.

"We believe that the news is a fundamental positive (for Acorda)," said Geoffrey Meacham, an analyst at J.P. Morgan. "That said, we recognize that some investors were looking for a near-term acquisition and therefore would expect near-term trading to be choppy."

Fampridine-SR is an oral, sustained-release drug designed to improve walking ability in people with MS.

Acorda maintains rights to the drug in the United States, where it is under review by regulators. A regulatory decision is expected by Oct. 22. Acorda has not yet submitted a European application for the drug. It said Biogen would be responsible for that.

Acorda will pay 7 percent of the up-front and milestone payments it receives from Biogen to Irish drugmaker Elan Corp (ELN.I), which manufactures Fampridine-SR. Elan shares rose nearly 5 percent.

Fampridine-SR, if approved, would broaden Biogen's MS franchise as the company battles to boost sales of Tysabri, which have been curtailed amid concerns over its association with a potentially deadly brain infection.

Biogen recently terminated a mid-stage trial of an experimental MS drug it was developing with Belgian drugmaker UCB SA (UCB.BR) after it was shown to be ineffective after a six-month treatment period.

Jonathan Aschoff, an analyst at Brean Murray Carret & Co, said the Acorda deal is expensive for Biogen.

"The extremely marginal efficacy we see in Fampridine may not be enough for European regulators to grant approval," he said.