Acorda Buys Its Way Into A Parkinson's Franchise

Acorda Therapeutics Inc. is doubling down on its 2014 wager on Civitas Therapeutics Inc., announcing a tender offer Jan. 19 to acquire Finland's Biotie Therapies Corp. and its Phase III tozadenant to reduce "off" time in Parkinson's disease patients.

In a same-day conference call, Acorda CEO Ron Cohen said the pipeline cobbled together via the two acquisitions could advance his firm into a "center of excellence" in Parkinson's.

The Ardsley, N.Y.-based company already has CVT-301, gained with its $525m buyout of Civitas two years ago (Also see "Acorda Buys Neurology Drug Developer Civitas Ahead Of IPO" - Pink Sheet, 24 Sep, 2014.). The inhalable dry-powder formulation of levodopa, the standard of care in Parkinson's, is now in Phase III. If the acquisition of Biotie succeeds, Acorda will have tozadenant, an adenosine A2a receptor antagonist, in Phase III as well, along with SYN120, a 5HT2a/5HT6 antagonist which Biotie has advanced to Phase II in Parkinson's-related dementia (Also see "Biotie Gears Up For New Pivotal Trial Of Tozadenant In Parkinson’s" - Pink Sheet, 20 Feb, 2015.).

Acorda's offer for Biotie comes to roughly $363m, or $25.60 per American Depository Share in the Finnish firm, a 94% premium over Biotie's closing price on Jan. 15, the last US business day before the offer was announced. [See Deal] Traded on the Nasdaq OMX Helsinki exchange since 2002, Biotie conducted a US initial public offering in 2015, netting $53m [See Deal].

Biotie announced that its board of directors unanimously backed the tender in a vote and that shareholders representing a 59% interest in the company already have irrevocably decided to support Acorda's offer. Holders of those shares include venture backers ViVo Capital and Versant Euro Ventures, as well as an individual investor, Don Bailey.

Although based in Turku, Finland, Biotie performs its clinical work in South San Francisco, Calif. Cohen told the investor call that "the Biotie team has done a remarkable job in developing [the two Parkinson's] programs and we intend to keep the team largely intact, as part of Acorda … and after final closing, which we anticipate in the second half of 2016, we intend to keep the South San Francisco facility fully operational and fully resourced."

Acorda also projects an NDA filing of CVT-301 in 2017, followed by a tozadenant filing before the end of 2018. Along with its Phase III candidate Plumiaz (diazepam nasal spray) for epileptic seizure clusters, the company anticipates three potential approvals that could yield more than $1bn in net sales at peak.

Cohen sees a $400m-plus sales ceiling for tozadenant and $500m for CVT-301, which he said will be complementary products that can leverage the neurology sales force Acorda is building. Acorda would increase the staff if CVT-301 were approved and does not anticipate needing additional staff for tozadenant's approval.

Clinical Development Risk Considerable

Leerink Partners analyst Paul Matteis took a mixed view of Acorda's gamble. He said in a Jan. 19 note that he appreciates the company's ongoing efforts to diversify into neurology and away from its marketed drug Ampyra (dalfampradine) for multiple sclerosis, but is wary of the clinical risk around tozadenant, which is trying to replicate Phase IIb efficacy results in a class where other drugs have failed between mid- and late-stage development.

Merck & Co. Inc.'s adenosine A2a antagonist preladenant failed in Phase III after producing strong efficacy data in Phase II in 2013, and development was halted (Also see "Merck Halts Preladenant Development In Parkinson’s Following Phase III Failures" - Pink Sheet, 24 May, 2013.). Kyowa Hakko Kirin Co. Ltd. got Nouriast (istradefylline) approved in Japan in 2013, but it has not been approved as of yet in the US or Europe (Also see "Kyowa Hakko Kirin Launches Nouriast For Parkinson’s Disease" - Scrip, 4 Jun, 2013.).

Matteis also questioned the effect size tozadenant produced in Phase IIb, roughly 1 hour in reduced off time with a 120mg twice-daily dose, noting that was approximately the same treatment effect seen in Phase II with Merck's candidate. He also noted that UCB Group returned all tozadenant rights to Biotie in 2014, although UCB said that decision was not due to any efficacy or safety concerns about the drug [See Deal].

"[We are] cautiously optimistic on the ongoing Phase III, which based on all of the above we believe has roughly a 50/50 chance of succeeding," the Leerink analyst wrote.

The Phase IIb study of tozadenant tested four doses against placebo over a 12-week treatment period, whereas the Phase III is testing the 120 mg and 60 mg doses over 24 weeks, Cohen said. Acorda believes data so far clearly demonstrate that 120 mg twice-daily is the optimal dose, but the study is also investigating the 60 mg dose to determine the minimum effective dose. The Phase III study is being conducted under a special protocol assessment Biotie worked out with FDA.

Asked why tozadenant might succeed in Phase III where preladenant failed, Cohen cited a recent article reviewing Merck's clinical program in the Journal of the American Medical Association (JAMA) that "point[ed] out a number of key methodological executional issues in the Phase III that very persuasively led to the failure of those trials."

"As long as we execute well and learn the lessons from preladenant in this case, I think we are in very good shape," he added. "By the way, the key to remember about preladenant is that [Merck's] positive control [rasagiline] failed as well in their trial, which really indicates a generic failure of execution in the trial."

In comparing the two adenosine A2a antagonists, Cohen noted that the Biotie molecule "has a higher and longer receptor occupancy" as well as a longer half-life and better bioavailability.

Cohen said CVT-301, intended to produce rapid improvement of off periods when they occur, and tozadenant, to reduce overall off time, would make a highly complementary franchise in Parkinson's. "We regard this acquisition as a major step forward in our plan to drive shareholder value and establish Acorda as a leading developer of therapies for neurological diseases," he said.