The major achievement during the year was the positive result from a Fampridine-SR Phase III trial for patients with Multiple Sclerosis. Fampridine-SR is a slow acting version of the potassium channel blocker 4-aminopyridine which appears, in laboratory tests, to improve impulse conduction in nerve fibers in which the insulating layer of the spinal cord, called myelin, has been damaged. It is not a cure and is not being tested as such. 4-aminopyridene, in much higher doses, is also used as an effective bird poison!
The company also mentioned a number of other corporate events during the year, addition of two new members to the Board and an additional payment from Paul of $5 million to fund an increase in sales force for its Zanaflex product. Zanaflex is a short-acting marketed drug for the management of spasticity, or pain and weakness associated with MS and other diseases. Its total sales were $18.1 million in 2006. On Friday February 16, 2006 the stock rose an impressive 9% on no news and now is close to a 52 week high.
Fampridine-SR was initially being developed for Spinal Cord Injury [SCI] and was the lead development product in December 2003 when the company originally filed its S1 to go public. The company at that time was conducting two Phase 3 clinical trials in people with SCI for the reduction of muscle stiffness, or spasticity. Their stated goal at that time was to submit an NDA for Fampridine-SR for the treatment of spasticity in SCI in 2004.
In 2004 it was later revealed by the company that data from one of the two SCI trials although showing a strong positive trend in a primary endpoint of reducing muscle spasticity, neither SCI trial achieved statistical significance in its primary endpoints. The development for this indication was subsequently dropped. The company in its withdrawn 2003 S1 indicated that it would be filing an FDA for the MS indication in 2005. In fact that filing will not actually take place until late 2008 or 2009 based on the need for an additional Phase III trial.
The Company’s other products are all in pre-clinical trials and cannot be used in support of its current valuation. In addition, we believe there is sufficient doubt over final approval of Fampridine-SR for the MS indication, notwithstanding the positive Phase III results, based on its history and the requirement for another trial to significantly discount its value. Zanaflex, though an interesting and increasingly successful product will never be a large revenue drug. Therefore our initial view of ACOR is that the value to date over $500 million (excluding cash and short-term investments) is not supportable by the current pipeline and marketed product.
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