Acorda convertibles, stock beaten down as FDA sends ‘refusal to file’; Citrix improves

By Stephanie N. Rotondo

Seattle, Aug. 29 – Acorda Therapeutics Inc. was the “story of the day,” a trader said on Tuesday.

The company’s 1.75% convertible notes due 2021 took a tumble – as did the underlying stock – as it was reported that the Food and Drug Administration had taken issue with a New Drug Application.

At the end of the session, a market source saw the convertibles around 85.25. That compared to levels around 92 previously.

Another trader said the convertibles were trading at 85.068 against a stock price of $18.15, on a 45% delta.

“Slightly better by my read,” he said.

As for the company’s shares, they retreated $6.25, or 24.32%, to $19.45 in well above-average trading.

The Arsley, N.Y.-based pharmaceutical company said Tuesday that the FDA had sent a “refusal to file” letter over its New Drug Application for Inbrija. The agency had two reasons for stating that it did not have enough information to review the drug, including the date a manufacturing facility would be ready for inspection and a question regarding the submission of the drug master production record.

The FDA also asked for more information once the drug is resubmitted, though that was not tied to the RTF.

Acorda initially filed the application for Inbrija in June. The company hopes to use the drug as a potential treatment for OFF periods in people with Parkinson’s disease.

But the timing of the RTF couldn’t be worse for Acorda. On Aug. 7, the company’s board of directors received a letter from investor Scopia Capital Management LP in which Scopia urged the board “to pursue an immediate review” of its strategic options, including a sale of the company as a whole.

The board, as well as company management, responded, stating that it had “thoroughly considered options to enhance shareholder value” and “unanimously determined” that putting all of its eggs in the Inbrija basket – the company also has high hopes for a second Parkinson’s-related drug – was “the best path forward to create value for shareholders.”

Away from Acorda, Citrix Systems Inc.’s 0.5% convertible notes due 2019 were being eyed as the stock posted a modest gain.

“I expect there’s not much change at all,” said a trader, placing the issue around 115.625. “Guys are pushing it around because they are bored.”

Another source said the debt was trading either side of 116, which was up a point.

Citrix’s equity ended the day up 82 cents, or 1.08%, at $76.42.

There was no fresh news out on the Fort Lauderdale, Fla.-based information technology company.

Mentioned in this article:

Acorda Therapeutics Inc. Nasdaq: ACOR

Citrix Systems Inc. Nasdaq: CTXS

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