By Mary Welch
With its lead drug for spinal cord injuries nearing Phase III trials, Acorda Therapeutics Inc. raised $20 million in a private placement. The money will be used to bring some of the Hawthorne, N.Y.-based company's research operations in-house as well underwrite about two-and-a-half years worth of operating expenses.
Some 7.47 million shares of Series E preferred stock were placed with a group of institutional investors led by MPM Asset Management's BBBioventure Fund, of Cambridge, Mass., and Vector Fund Management, of Deerfield, Ill. Following the placement, the company has 15 million shares outstanding. Also participating in the round were MDS Capital Corp., of Toronto, and New York Life, of New York.
"Up until now, we were a 'virtual' company," Tierney Saccavino, manager of public relations, told BioWorld Today. "This funding will allow us to hire scientists as well as set up laboratories. We still will use research laboratories in the U.S. as well as Europe. We also will, of course, use the money to continue to fund clinical trials."
Founded in 1995 to develop therapeutic products for spinal cord injury and other central nervous system conditions, Acorda initially is focusing on patients who are paraplegic or quadriplegic as result of a spinal cord injury. It is also doing some work with multiple sclerosis. More than 250,000 people in the U.S. live with the permanent disability and about 12,000 are injured annually. The estimated cost of care exceeds $8 billion a year in the U.S., or about $1.5 million per patient lifetime.
The privately held company was founded by Ron Cohen, who was a principal in the start-up team of Advanced Tissue Sciences, of La Jolla, Calif.
Fampridine, Acorda's lead product, finished its Phase II trial in late spring with the results unblinded in mid-summer. The company expects to enter Phase II trials for Fampridine for multiple sclerosis by mid-1999. Fampridine (4-aminopyridine) is a nerve conduction-enhancing compound that has been shown to restore some neurological function in people with spinal cord injury by increasing the ability of demyelinated nerve processes (axons) to conduct electrical impulses.
It acts by blocking specialized potassium channels on nerve cells and axons. These channels are exposed when the insulating myelin sheath around the axons is damaged during the trauma to the spine. The exposed potassium channels allow current to "leak" out of the axon, short-circuiting normal conduction. By blocking these channels, fampridine restores the ability of the axon to conduct. Since the effect appears to exist as long as fampridine is present, it must be taken chronically to maintain an effect.
"The trial enrolled 60 subjects. We will be deciding over the next month what to do next — conduct smaller-target trials or jump into Phase III," Saccavino said.
Two Preclinical Projects Under Way
The company, which intends to have between 15 to 20 employees by year-end, also has two preclinical programs. The first is organized around M1 myelinating monoclonal antibodies, which stimulate remyelination of central nervous system axons. So far the experiments have shown that M1 helped mice recover neurological functions and significantly increased survival. Acorda is working to humanize M1 and to complete preclinical toxicology studies. It is also seeking corporate partners to assist in commercializing the M1 technology for multiple sclerosis worldwide.
Acorda's second preclinical project is the L1 axonal guidance protein, shown to help restore walking ability in animals following spinal cord injury. It is a neural cellular adhesion molecule critical to normal growth and development of the fetal nervous system.
The $20 million financing is not the first major round for Acorda. Prior to this round, it raised about $8 million from individual and equity investors, a corporate partnership with Elan Corp., of Athlone, Ireland, and grants. *