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Acorda Therapeutics' MS Drug Fails at Low Dose, Shares Rise


The company tested its treatment Ampyra at the FDA's request. The drug's success at a lower dose would have created a strategic challenge.

MINYANVILLE ORIGINAL Usually when a company's drug fails in a study, investors sell the stock. Acorda Therapeutics (ACOR) is trading higher Monday after the company said that a low dose of its multiple sclerosis treatment Ampyra didn't meet a study goal.

Following US approval of Ampyra in 2010, the company was required by the Food and Drug Administration to test the medicine at a dose of 5 milligrams twice a day. The drug, which helps MS patients improve their ability to walk, is approved in the US at 10 milligrams twice daily, but the FDA wants to make certain that a lower dose of the drug wouldn't work just as well. (Lower doses usually mean potentially fewer side effects.)

Acorda CEO Ron Cohen says the study shows that Ampyra is approved at the right dosage and he believes the commitment to the FDA to test the drug post approval is complete pending a follow-up meeting with the agency.

"Ten milligrams twice daily is the appropriate safe and effective dose," Cohen told investors and analysts on a conference call Monday.

There was concern among investors that if Ampyra showed evidence of working at a lower dose, the FDA would require future testing and, ultimately, the drug would be reformulated. The problem with that: Acorda's patents largely focus on the 10 milligram formulation, protecting the drug for that dose through 2027. The drug isn't protected nearly as long for the lower dose indication.

Shares of Acorda rose 3% to $22.40 in midday trading Monday. They have dropped 6% this year.

The company isn't out of the woods yet. The FDA may decide that further study is warranted.

Something else stood out in the brief research description provided by the company. Not only did the drug not work at helping MS patients' walking speed at the low dose, but the drug didn't meet the study's goal at the approved dose. The company explained that the goal of the post-approval study was different than the endpoint of the pivotal trial that helped Acorda win US market clearance.

While Acorda executives explained the nuances of the two studies and assured investors that there would be no fallout from the recent study, some analysts are skeptical.

The study removes an overhang on the stock but "the data also raise new questions about the marketed dose's benefits," Robert W. Baird analyst Christopher Raymond says in a note. "Given this and given our consistent feedback that physicians have not been overwhelmed by Ampyra's efficacy in the first place, we remain on the sidelines."

Acorda spokesman Jeff Macdonald counters that there are plenty of doctors prescribing the drug to their patients. More than 65,000 patients have used the drug, he says. In addition to previous studies of Ampyra, there are a couple of years of physicians' experience with the treatment to draw conclusions.

Ampyra accounts for most of Acorda's sales and almost all of its product revenue. The company reported sales of $146.9 million through the first six months of 2012, a 16% increase from the same period a year earlier. Net income for the first half of this year was $12.4 million, compared with a $957,000 loss in the year-earlier period.

Twitter: @brettchase

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