News Article

UPDATED: Acorda snags Phase III Parkinson's drug in $525M cash buyout
Date: Sep 24, 2014
Author: John Carroll
Source: Fierce Biotech ( click here to go to the source)

Featured firm in this article: Acorda Therapeutics Inc of Pearl River, NY

Acorda Therapeutics is gambling $525 million on a Phase III-ready Parkinson's treatment, striking an all-cash deal to buy Civitas Therapeutics.
Acorda CEO Ron Cohen

Acorda ($ACOR) now has control of CVT-301, a fast-acting rescue formulation of levodopa that can be self-administered through an inhaler. Just weeks ago Civitas nailed down a $55 million venture round from a long lineup of backers, then pivoted to an IPO filing. But that was evidently all part of the bargaining process for this drug, with Acorda settling on an unusual all-cash deal for an experimental program.

Acorda CEO Ron Cohen characterized the buyout as a significant strategic shift for the company. And he estimated potential U.S. sales at $500 million a year, saying the therapy--which depends on new delivery technology--is a "potentially transformative therapy for people with Parkinson's disease to rapidly and predictably treat OFF episodes."

Acorda's shares shot up 16% this morning after the news hit.

"The acquisition adds an exciting product candidate to Acorda's pipeline that addresses a significant unmet need in Parkinson's disease," Cohen says in a statement. "It also leverages Acorda's existing development and commercial capabilities and creates an opportunity for us to develop a global presence. In addition, Civitas' ARCUS technology adds a proprietary platform with the potential for future development opportunities."

Back when it was pitching an IPO, Civitas noted in its S-1 that its deal with Alkermes--which had once upon a time been partnered with Eli Lilly on inhaled insulin--gives it the facilities it needs to produce plenty of the therapy for its pivotal Phase III trial. The biotech has burned through close to $90 million to get to this stage.

Now Acorda will be in control of the Phase III study, with a trial launch planned for next year and a regulatory filing--if all goes well--by the end of 2016.

Acorda's R&D game plan was hit with a setback in May of this year, when the FDA rejected its nasal spray--Plumiaz--for epilepsy. Regulators said the treatment was unapprovable based on the data in hand, forcing Acorda to go back to the drawing board. The biotech is best known for the MS drug Ampyra, which was approved back in 2010 and earned $303 million last year. Now Parkinson's has emerged as its second big play.

ISI's Mark Schoenebaum quickly came out with a thumbs up on the deal.

"It's an obvious strategic fit (specialty neuro)," he noted. "Investors were "prepped" for such a deal by ACOR mgmt, the medical need for the new product is clearly real, Phase III cost should be manageable, deal is likely to be highly accretive (eventually) even at sales levels that fall short of company's peak $500M US sales guidance, and the data look solid."

Alkermes comes out as one of the big winners in this deal. The company received about $60 million from today's Civitas transaction, plus future product royalties, says a spokesperson for the company. "It enables Alkermes to reinvest funds from the non-core assets of its inhaled drug delivery business (spun out to Civitas in Jan 2011) into the novel NCE drug candidates in ALKS's clinical pipeline for CNS diseases," she added.

Civitas has been touting the potential impact of a new approach for rescue doses of levodopa.

Parkinson's disease "is the second most common neurodegenerative disorder worldwide," Civitas noted in its IPO filing. "Over one million people in the United States and between seven and 10 million people worldwide suffer from PD. The majority of PD patients experience OFF episodes, which increase in frequency and severity during the course of their disease. OFF episodes are considered one of the greatest unmet medical needs facing PD patients as they often result in patients' inability to perform simple daily tasks such as eating, bathing and dressing. As the disease progresses, patients are often forced to leave the workforce early and become increasingly dependent on care-givers. We believe the current addressable market for CVT-301 in the United States and Europe alone is approximately 350,000 patients and 420,000 patients, respectively."