Just two days after initiating its second Phase III trial for multiple sclerosis drug Fampridine-SR, Acorda Therapeutics Inc. priced a public offering of 3.63 million shares at $18.50 per share.
According to David Amsellem, analyst with Friedman, Billings, Ramsey & Co. Inc., the deal should provide "more than enough" funding to carry Acorda through the Phase III trial and subsequent regulatory process.
The offering, drawn from a $150 million universal shelf registration filed last month, originally included plans to sell 3.38 million shares at $19.70, the closing price just before the offering was filed last week. Acorda has since upped the volume and lowered the price.
The current offering price represents a slight discount to the company's Thursday closing price of $18.95. Shares of Hawthorne, N.Y.-based Acorda (NASDAQ:ACOR) traded down 56 cents on Friday to close at $18.39.
In addition to the 3.63 million shares being sold by the company, 123,040 shares are being offered by certain affiliate stockholders. Acorda also will make an additional 562,500 new shares available to joint bookrunning managers Banc of America Securities LLC and Deustche Bank Securities to cover any overallotments.
A significant chunk of proceeds from the offering will be used to support Fampridine-SR, a sustained-release tablet formulation of 4-aminopyridine that blocks exposed potassium channels to improve electrical signaling in demyelinated neurons. In a Phase III trial, the drug increased walking speed by an average of 25.2 percent in 34.8 percent of multiple sclerosis patients - sending Acorda's stock price up 282 percent. (See BioWorld Today, Sept. 26, 2006.)
The recently initiated Phase III trial will follow a similar design as the last, so Amsellem was optimistic that it, too, will be successful. Both trials were designed under a special protocol assessment, and both evaluated the drug's safety and efficacy in improving walking ability in MS. Acorda has stated that the two trials combined will be sufficient to support a new drug application filing, which Amsellem said could come as early as the first half of 2008.
But Eugene Trogan, analyst with Morgan Joseph & Co. Inc., told BioWorld Today he was "unimpressed" by both the rate and degree of response in the first Phase III trial. He said that non-pharmacologic methods, such as physical therapy, have been shown to have a better effect on mobility. He also raised concerns about the risk of seizure and QTc prolongation with Fampridine-SR.
If Fampridine-SR gains approval, it will be the first MS drug specifically indicated to improve walking ability. MS treatment is dominated by disease-modifying agents designed to prevent or delay disability, such as Avonex (interferon beta-1a, Biogen Idec Inc.), which pulled in $1.71 billion in worldwide sales last year, and Copaxone (glatiramer acetate, Teva Pharmaceuticals Inc.), which claimed $1.41 billion in global 2006 sales. Other disease-modifying agents for MS include Betaseron (beta interferon 1b, Berlex Laboratories Inc.), Rebif (beta interferon 1a, Merck Serono), and Tysabri (natalizumab, Biogen Idec Inc. and Elan Corp. plc).
Of the estimated 400,000 Americans and 2.5 million people worldwide with MS, about 80 percent suffer from some sort of walking disability. Amsellem predicted Fampridine-SR could have peak U.S. sales potential of $550 million in that indication. He also said that most MS specialists polled by his firm said they would start all of their MS patients with walking disability on the drug.
In preparation for a potential launch of Fampridine-SR, Acorda has built a 65-person niche sales force that markets spasticity management drug Zanaflex (tizanidine hydrochloride) to neurologists, other specialists, and primary care physicians who treat conditions that involve spasticity.
Zanaflex tablets and capsules brought in gross sales of $8.8 million in the first quarter, and Amsellem said quarter-over-quarter prescription growth has been in the mid-teens. Although 12 generic versions of tizanidine dominate the market, Acorda has been able to establish pharmacokinetic differences in the Zanaflex capsules that allow them to be marketed as a branded, non-substitutable product.
Acorda has three additional programs in preclinical development, but the majority of its resources remain focused on Fampridine-SR, at least for the time being.
Proceeds from the offering will supplement the $45.2 million in cash, equivalents and short-term investments that Acorda had as of March 31. The company posted a net loss of $7.5 million for the first quarter.