Biogen gains overseas rights to MS drug
Biogen Idec Inc. of Cambridge has acquired rights outside the United States to Acorda Therapeutics Inc.'s experimental multiple sclerosis drug, the companies said.
Biogen Idec, which makes the multiple sclerosis drugs Avonex and Tysabri, will pay Acorda $110 million up front for rights to Fampridine-SR. It could also pay up to $400 million more if the drug meets certain regulatory and sales milestones.
While some analysts believe the deal's terms are attractive to Acorda, the company's shares fell 6 percent to $26.49 in premarket trading as investors had hoped the company would be acquired.
"We believe that the news is a fundamental positive, though we would not be surprised to see the acquisition premium diminished," said Geoffrey Meacham, an analyst at J.P. Morgan. "We recognize that some investors were looking for a near-term acquisition and therefore would expect near-term trading to be choppy."
Biogen Idec will make tiered, double-digit royalty payments to Acorda on overseas sales of Fampridine-SR, which is an oral, sustained release drug designed to improve walking ability in people with multiple sclerosis.
Acorda maintains rights to the drug in the United States, where the medicine is under review by regulators and a decision is expected by Oct. 22. The company has not yet submitted a European application for the drug.
Acorda will pay 7 percent of the upfront and milestone payments it receives from Biogen Idec to Irish drugmaker Elan , which manufactures Fampridine-SR.
Fampridine, if approved, would broaden Biogen Idec's MS franchise as the company battles to boost sales of Tysabri, which have been curtailed amid concerns over its association with a potentially deadly brain infection.
Joel Sendek, an analyst at Lazard Capital Markets, estimates sales of Fampridine-SR outside the United States of $85 million in 2011 and $145 million in 2012.
Biogen Idec shares were unchanged at $45.15 in premarket trading.
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