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business newsAcorda Rises on European Surprise
By
Brett Chase
May 20, 2011 11:30 am
Investors wrote off Acorda's chances of getting European approval for MS drug Fampyra, but Biogen changed some minds.
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European drug regulators are expected to approve Fampyra, a treatment that helps multiple sclerosis patients with walking disability. (The drug is sold as Ampyra in the US.) An EU panel recommended the drug be approved for sale, raising expectations that the final government OK will be granted within the next two months or so. Development partner Biogen Idec (BIIB) will market the treatment, paying Acorda double-digit royalties from EU sales.
Shares of Acorda rose 15% to $30.73 in morning trading Friday, reversing losses from earlier this year when the drug appeared to be heading toward an EU rejection. Biogen rose 1% to $97.66.
Acorda was just one of several companies to get word Friday that European officials are close to granting drug approval. See the full list of the Committee for Medicinal Products for Human Use here.
Human Genome Sciences’ (HGSI) lupus drug Benlysta also was recommended for approval. Partner GlaxoSmithKline (GSK) will help sell the drug.
Merck’s (MRK) hepatitis C drug Victrelis -- just approved in the US -- gets a thumbs-up from the EU advisory committee as well. Others getting an initial EU nod: Bristol-Myers Squibb’s (BMY) skin cancer treatment Yervoy; Theravance (THRX) and Astellas’ antibiotic Vibativ; and Amgen’s (AMGN) Xgeva bone treatment for cancer patients. The treatments already are approved by the US Food and Drug Administration.
Acorda’s stock is rising the most of all the companies receiving positive word today. That’s because an EU approval would be a surprise after the advisory panel initially panned the drug in January. Biogen appealed the decision and the committee now says the drug should be approved on the condition that the companies provide additional study data on Fampyra’s safety and effectiveness.
“Following re-examination of its previous opinion, the committee adopted a final positive opinion, recommending the granting of a conditional marketing” approval, the committee says in a statement.
Leerink Swann analyst Joshua Schimmer recommends buying the stock and raised his price target for Acorda’s to the mid-$30s from a previous estimate of low $30s. He had assumed the drug wouldn’t get EU approval until 2014. To be exact, Acorda says it expects a decision within 67 days.
The final decision on these drugs will be up to the European Medicines Agency, the European equivalent of the US FDA. The EU agency will review Acorda’s additional data on Fampyra in a year.
No positions in stocks mentioned.
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