Acorda Therapeutics Inc (NASDAQ:ACOR) rose significantly after announcing its agreement to acquire Civitas Therapeutics Inc (NASDAQ:CVTS), a privately-held biopharmaceutical company.
The stock price of Acorda Therapeutics Inc (NASDAQ:ACOR) closed $37.62 per share, up by 28% on Wednesday.
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Acorda Therapeutics Inc (NASDAQ:ACOR) agreed to purchase Civitas Therapeutics Inc (NASDAQ:CVTS) for $525 million in cash.
The acquisition included the rights to ARCUS, the proprietary pulmonary delivery technology and the manufacturing facility of Civitas Therapeutics located in Chelsea, MA.
Acorda Therapeutics Inc (NASDAQ:ACOR) also obtained worldwide rights to CVT-301, a phase 3 treatment candidate for OFF episodes of Parkinson’s disease (PD).
The transaction is expected to be completed in the fourth-quarter this year subject to customary closing conditions.
Acquisition offers substantial synergies for Acorda Therapeutics
Ron Cohen, M.D., president and CEO of Acorda Therapeutics Inc (NASDAQ:ACOR) said the acquisition offers substantial synergies between its capabilities, people and pipeline.
Cohen emphasized that both companies have a passion for developing novel therapies for people with neurological diseases. According to him,
“The acquisition adds an exciting product candidate to Acorda’s pipeline that addresses a significant unmet need in Parkinson’s disease.”
He added that the deal leverages the existing development and commercial capabilities of Acorda Therapeutics Inc (NASDAQ:ACOR), and it creates opportunities for its global expansion.
CVT-301 provides a compelling opportunity
According to Cohen, CVT-301 provides a compelling opportunity because it is a “potentially transformative therapy for people inflicted with Parkinson’s disease as it could treat OFF episodes rapidly and predictably.
Cohen pointed out that the phase 2b trial for CVT-301 was strongly positive. He added that it had a clearly-defined regulatory pathway and extensive IP protection.
Acorda Therapeutics Inc (NASDAQ:ACOR) estimated that CVT-301 will generate more than $500 million sales in the United States.
There are approximately one million people diagnosed with Parkinson’s disease in the U.S. and about 7 to 10 million worldwide. The symptoms of the disease include tremors at rest, rigidity and impaired movement.
Mark Iwicki, CEO of Civitas Therapeutics Inc (NASDAQ:CVTS) said, “Our shared conviction in the potential of CVT-301 and the ARCUS technology, combined with a mutual passion for improving the lives of people with neurological diseases, make this acquisition an ideal match of expertise, vision and culture.”