Irish private equity group Fountain Healthcare is one of the big winners following the sale of a company that has developed a experimental therapy for Parkinson's disease. Acorda Therapeutics yesterday paid $525 million (€410 million) in cash for privately-held Civitas Therapeutics, a spin-off from Alkermes, the US company that acquired Elan Drug Technologies in 20
11 in a $960 million deal.
Acorda swooped on Civitas just ahead of a planned flotation that was expected to raise $75 million for the fledgling company, valuing it at about $330 million.
Fountain was one of three venture capital groups to invest in Civitas when it was established in 2011. It was also involved in a $55 million fundraising by Civitas last month.
Civitas is developing an inhaled form of the drug levadopa that is used by Parkinson’s patients in tablet form.
The company expects that its technology will allow rapid delivery of the drug. At present, it is difficult to establish a dosing regime with tablets that maintain drug levels within a therapeutic range. As the drug wears off, patients experience a return of tremors associated with the disease.
Acorda chief executive Ron Cohen yesterday described the acquisition as a "compelling opportunity" and said he expected US sales to exceed $500 million a year when its comes to market.
Parkinson’s disease
Acorda said in a statement that there are about one million people in the US and between seven to 10 million worldwide diagnosed with Parkinson’s.
Aidan King, managing partner of Fountain Healthcare, said the Civitas roadshow showed that the IPO deal would have been heavily oversubscribed "and would have been one of the best Nasdaq IPOs of the 2013/14 life science window". However, the company decided to go instead with Acorda's cash offer.
“The Acorda acquisition option was attractive as the deal is all cash upfront with a healthy premium,” said Mr King. Acorda was a strong partner of Irish drug group Elan for many years. Two of its three marketed drugs, Zanaflex and Ampyra, were developed in collaboration with Elan, as was Fampridine, which is now marketed by Biogen Idec.
Markets welcomed the deal, which is the biggest to date by Acorda, marking its shares up as much as 21 per cent in early trade in New York.
