FDA Asks Acorda to Conduct Another Phase III Trial
by H.S. Ayoub
BioHealthInvestor.com
Back on September 25 shares of Acorda Therapeutics (ACOR) gained 280% in one day after the company announced that its Multiple Sclerosis drug Fampridine-SR significantly increased walking speed in MS patients compared to those taking placebo.
I immediately criticized the day's gain as another example of the bipolar-like mentality that is characteristic of biotech investing.
On Friday the company announced the obvious; the FDA will need another phase III trial to confirm the previous study's results.
Many in the investment community were excited and hopefull that the FDA would find the current trial data satisfactory so that the company can move ahead and plan its NDA application (edit).
This does not mean that Fampridine-SR will not be approved nor that Acorda is a bad investment. It is just wise practice to consider a stock's market valuation before committing any capital.
While the market valuaion of $400 million might seem cheap considering the potential sales figures an approved drug might bring the company, one must be careful however. The stock was as low as $2 just three months ago!
Does Acorda's current price of $17.55 a share seem to be fair, considering the inherent risks associated with biotechnology studies? Is the potential upside worth the risk at this current valuation?
I personally do not think so, especially considering the many shares unloaded by insiders over the last couple of months.
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BioHealthInvestor.com
Back on September 25 shares of Acorda Therapeutics (ACOR) gained 280% in one day after the company announced that its Multiple Sclerosis drug Fampridine-SR significantly increased walking speed in MS patients compared to those taking placebo.I immediately criticized the day's gain as another example of the bipolar-like mentality that is characteristic of biotech investing.
On Friday the company announced the obvious; the FDA will need another phase III trial to confirm the previous study's results.
Many in the investment community were excited and hopefull that the FDA would find the current trial data satisfactory so that the company can move ahead and plan its NDA application (edit).
This does not mean that Fampridine-SR will not be approved nor that Acorda is a bad investment. It is just wise practice to consider a stock's market valuation before committing any capital.
While the market valuaion of $400 million might seem cheap considering the potential sales figures an approved drug might bring the company, one must be careful however. The stock was as low as $2 just three months ago!
Does Acorda's current price of $17.55 a share seem to be fair, considering the inherent risks associated with biotechnology studies? Is the potential upside worth the risk at this current valuation?
I personally do not think so, especially considering the many shares unloaded by insiders over the last couple of months.
_
posted by Nico at
12:30 PM
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