Acorda Therapeutics Inc. (ACOR) will pay up to $35 million to Medtronic Inc. (MDT) for global development and commercialization rights to the medical-device maker's magnesium formulation as a potential treatment for neurological traumas like spinal cord and brain injuries.
Medtronic gets a $3 million upfront payment and up to $32 million in milestone payments, plus potential single-digit sales royalties if Acorda commercializes the clinical-stage compound. Medtronic has some nonexclusive rights with Acorda in certain areas such as pain and musculoskeletal indications.
Acorda President and Chief Executive Ron Cohen said the magnesium formulation is an important addition to the company's pipeline of drug candidates.
The treatment received Food and Drug Administration fast-track designation in February 2009 for spinal cord injury patients. Acorda plans to seek orphan drug designation in the U.S. Fast-track status typically is given to treatments for life-threatening conditions for which no other drug exists or works as well. Orphan drug status is to encourage development of drugs for rare diseases.
Medtronic in May reported its fiscal fourth-quarter earnings fell 19%, hit by restructuring costs linked to recent job cuts, while sales edged higher despite a drag from continued growth challenges in markets for implantable defibrillators and spinal devices.
Acorda in May reported that its first-quarter performance fell short of estimates amid disappointing sales of its Ampyra drug, which is used to improve walking ability of multiple sclerosis patients.
Shares of Acorda and Medtronic closed Thursday at $32.31 and $38.53, respectively. Neither was active premarket.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com