Morning Commentary: Acorda convertibles, stock take beating as FDA sends a ‘refusal to file’

By Stephanie N. Rotondo

Seattle, Aug. 29 – Acorda Therapeutics Inc.’s 1.75% convertible notes due 2021 were taking a tumble – as was the underlying stock – as it was reported that the Food and Drug Administration had taken issue with a New Drug Application.

One 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.

At another desk, a market source pegged the convertibles with an 84 handle, which compared to levels around 92 previously.

As for the company’s shares, (Nasdaq: ACOR), they were down over 26% at mid-morning.

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.

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