Acorda's seizure spray gets the FDA blow-off

Acorda CEO Dr. Ron Cohen

The FDA has rejected Acorda Therapeutics' ($ACOR) nasal spray for epilepsy, throwing a wrench in the biotech's plan for a quick trip to the market with its orphan drug.

Acorda was moving through the agency's 505(b) pathway, looking to ride positive feasibility study results to an approval for Plumiaz, a nasal spray formulation of diazepam designed to treat cluster seizures in patients with epilepsy. But the FDA deemed the drug unapprovable based on current data, and Acorda no longer expects to win U.S. clearance this year, the company said.

Just what alarmed the FDA remains unclear, and Acorda said it expects "to do additional clinical work," not specifying whether that means a full-blown new trial. The company is in the midst of evaluating the agency's complete response letter with plans to refile a new drug application, and CEO Dr. Ron Cohen said in a statement that Acorda will provide further details as its discussions with the FDA progress.

"There is an urgent need for new treatments for people with epilepsy who experience cluster seizures," Cohen said. "We are committed to the development and commercialization of Plumiaz, a potential therapeutic option for these individuals."

But ISI analyst Mark Schoenebaum is far more bearish. In a note to investors, Schoenebaum said Plumiaz's rejection will likely delay its launch by one to three years, possibly enough time for Pfizer ($PFE) to hit the market with its intramuscular diazepam formulation and snatch Acorda's orphan drug crown.

Plumiaz targets the roughly 175,000 U.S. epileptics who suffer from cluster seizures, and, under FDA guidelines, Acorda can rely on earlier safety and efficacy findings on diazepam to buoy its way to approval.

Acorda's shares dipped about 8% on the news.

- read the statement