January 21, 2011 / 12:12 PM / 8 years ago

UPDATE 3-EU regulators vote against Biogen MS drug

* EU regulators vote against approving Fampyra

* Fampyra is sold in the U.S. under brand name Ampyra

* Acorda shares fall 16 percent; Biogen down 3.3 percent (Updates with details, analyst comment. Adds BOSTON dateline)

By Toni Clarke

BOSTON, Jan 21 (Reuters) - Biogen Idec Inc (BIIB.O) said on Friday that European regulators voted against approving its multiple sclerosis drug Fampyra, saying it was not convinced the drug’s benefits outweighed its risks.

The decision surprised investors and sent Biogen’s stock down 3.3 percent. Shares of Acorda Therapeutics Inc (ACOR.O), which developed the drug and sells it in the United States under the brand name Ampyra, fell 16 percent.

In 2009, Biogen paid $110 million for the right to market the drug, also known as fampridine-SR, outside the United States. It agreed to pay up to $400 million more, and a double digit royalty, if the drug met regulatory and sales goals.

Irish drugmaker Elan Corp ELN.I manufactures Ampyra.

It is unusual for a drug to be rejected in Europe after being approved in the United States.

“We and most of the Street were expecting approval given the unmet need in Europe and the fact that it has been approved in the U.S. last year with a robust uptake,” said JPMorgan analyst Geoff Meacham.

Fampridine was expected to generate about $891 million in sales by 2014, according to Thomson Pharma.

Analysts on average were forecasting fampridine revenue outside the United States of $203 million in 2013, according to Meacham. He predicted sales in 2013 of $107 million.

Acorda has long been considered an acquisition target, and part of the reason that its share price fell is because of concerns that the European decision could make it less attractive to a buyer.

“While the earnings per share downside is manageable, the bigger driver here is the degradation of what we think has been a meaningful take-out premium,” said Robert W. Baird analyst Christopher Raymond in a research note.

Biogen, which makes the multiple sclerosis drugs Avonex and Tysabri, said it will appeal the decision by the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency.

The European Commission typically endorses CHMP recommendations.

Some analysts think the company will have trouble getting approval.

“We do believe Ampyra will ultimately be an approvable drug in the EU, although the appeal process from what we have seen has a fairly low success rate and additional clinical trials may be required,” said Leerink Swann analyst Joshua Schimmer in a research note.

The CHMP said it was not convinced that the drug’s ability to improve walking in patients with multiple sclerosis offset side effects such as pain and dizziness.

The committee also noted lack of adequate long-term data on some groups of patients such as the elderly and patients with epilepsy or heart problems.

Acorda’s shares fell 16.3 percent to $23.29 in late morning trading on Nasdaq. Biogen’s shares fell 3.3 percent to $66.54. (Additional reporting by Anand Basu in Bangalore. Editing by Robert MacMillan)

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