As filed with the Securities and Exchange Commission on September 26, 2003February 3, 2006

Registration No. 333-          333-128827

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 6 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

ACORDA THERAPEUTICS, INC.
(Exact nameName of registrantRegistrant as specifiedSpecified in its charter)Charter)

15 Skyline Drive
Hawthorne, New York 10532
(914) 347-4300
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)

Ron Cohen
Chief Executive Officer
15 Skyline Drive
Hawthorne, New York 10532
(914) 347-4300

(Name, address, including zip code,Address, Including Zip Code, and telephone number, includingTelephone Number,
area code,Including Area Code, of agent for service)Agent For Service)

Approximate date of commencement of proposed sale to the public:    As soon as practicable after the effective date of this Registration Statement.

        If any of the securities being registered on this form are to bebeing offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the "Securities Act") check the following box. o

        If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

        If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

        If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

        If delivery of the prospectus is expected to be made pursuant to Rule 434 under the Securities Act, please check the following box. o

CALCULATION OF REGISTRATION FEE

(1)

Includes a maximum of        shares of common stock that may be purchased by the Underwriters to cover over-allotments, if any.

(2)

Estimated solely for the purpose of determining the registration fee pursuant to Rule 457(o) promulgated under the Securities Act of 1933, as amended.

        The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until thethis registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we areis not soliciting an offeroffers to buy these securities in any jurisdictionstate where the offer or sale is not permitted.

Prospectus

SUBJECT TO COMPLETION, DATED SEPTEMBER 26, 2003FEBRUARY 3, 2006

Prospectus

5,500,000 Shares

Common Stock

        Acorda Therapeutics, Inc. is offering 5,500,000 shares of common stock. This is our initial public offering, and no public market currently exists for our shares. We anticipate that the initial public offering price will be between $$11.00 and $$13.00 per share. After the offering, the market price for our shares may be outside this range.

        We will applyhave applied to list our common stock on Thethe Nasdaq National Market under the symbol "ACRD."ACOR."

        Investing in our common stock involves a high degree of risk. See "Risk Factors" beginning on page 8.9.

        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

        We have granted the underwriters the right to purchase up to 825,000 additional shares of common stock to cover any over-allotments. The underwriters can exercise this right at any time within 30 days after the offering. The underwriters expect to deliver the shares of common stock to investors on or about                       , 2003.2006.

Banc of America Securities LLC

Lazard

U.S. Bancorp Piper Jaffray

RBC Capital Markets

                  , 20032006

        You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized anyone to provide you with different information. We are not making offers to sell or seeking offers to buy these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information contained in this prospectus is accurate as of the date on the front of this prospectus only. Our business, financial condition, results of operations and prospects may have changed since that date.

We have registered "Acorda Therapeutics" and our logo as trademarks in the United States. Other trademarks mentioned in this prospectus are the property of their respective owners.

TABLE OF CONTENTS

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SUMMARY

        This summary highlights information contained elsewhere in this prospectus. This summary is not complete and does not contain all of the information you should consider before investing in our common stock. You should read the entire prospectus carefully including the "Risk Factors" section and our consolidated financial statements and the related notes included in this prospectus before making an investment decision. References in this prospectus to "Acorda," "the company," "we," "us" and "our" refer to Acorda Therapeutics, Inc.

OUR BUSINESS

Overview

        Acorda Therapeutics isWe are a late-stagecommercial-stage biopharmaceutical company dedicated to the identification, development and commercialization of novel therapies that improve neurological function in people with multiple sclerosis, or MS, spinal cord injury, multiple sclerosisor SCI, and relatedother disorders of the central nervous system, or CNS. Our currentmarketed product, candidatesZanaflex Capsules, is FDA-approved for the management of spasticity. Our lead product candidate, Fampridine-SR, is in a Phase 3 clinical trial for the improvement of walking ability in people with MS. Our preclinical programs also target the treatment of a wide range ofMS and SCI, as well as other CNS disorders, affecting individuals with chronic spinal cord injury, referred to as SCI,including stroke and multiple sclerosis, referred to as MS, including spasticity, muscle weakness, loss of bowel and bladder control and sexual dysfunction.traumatic brain injury.

        Approximately 500,000650,000 people in the United States suffer from MS or SCI and MS and we believe that the combined annual cost of treatment for these conditions exceeds $9$13 billion. It is estimated that a total of approximately 10 million people live with the long-term consequences of traumatic brain injury and stroke.

        Our goal is to becomecontinue to grow as a fully integratedfully-integrated biopharmaceutical company by commercializing multiple therapeuticpharmaceutical products, developing our product candidates and advancing our preclinical programs for these large and underserved markets while continuingmarkets. We plan to augmentaccomplish this through our product pipelinesales and to identify new applications formarketing infrastructure, our core technologies.extensive scientific and medical network, our partnerships and our clinical and management experience.

Our Product CandidatesPipeline

Zanaflex

        Our products, Zanaflex Capsules and Zanaflex tablets, are FDA-approved for the management of spasticity, a symptom of conditions such as MS and SCI that is commonly characterized by stiffness and rigidity, restriction of movement and painful muscle spasms. Zanaflex Capsules and Zanaflex tablets contain tizanidine hydrochloride, or tizanidine, one of the two leading treatments currently used for the management of spasticity. We acquired Zanaflex Capsules and Zanaflex tablets from a wholly-owned subsidiary of Elan Corporation, plc, or Elan, in July 2004. This strategic acquisition provided us with the opportunity to build a commercial infrastructure, develop sales and marketing expertise and create a foundation for future product launches, in addition to generating product revenue.

        In April 2005, we launched Zanaflex Capsules, a new capsule formulation of tizanidine. This product is protected by an issued U.S. patent. Zanaflex tablets lost compound patent protection in 2002 and both products now compete with 11 generic versions of tizanidine tablets.

        We believe that Zanaflex Capsules offer important benefits over Zanaflex tablets and generic tizanidine tablets. When taken with food, Zanaflex Capsules have a different blood absorption profile, referred to as pharmacokinetic profile, than Zanaflex tablets and generic tizanidine tablets, generally resulting in a lower level and more gradual rise of peak levels of tizanidine in a patient's blood. As a result of this different pharmacokinetic profile, Zanaflex tablets and generic tizanidine tablets are not therapeutically equivalent, or AB-rated, with Zanaflex Capsules. Therefore, under state pharmacy laws, prescriptions written for Zanaflex Capsules may not properly be filled by the pharmacist with Zanaflex tablets or generic tizanidine tablets. Zanaflex Capsules are also available in a higher dose, which gives patients and prescribers an additional choice in dosing and an opportunity to reduce the number of pills a person must take daily. In addition, people who have difficulty swallowing may find Zanaflex Capsules easier to take.

        To support our commercialization of Zanaflex Capsules, we have established a sales and marketing infrastructure consisting of our internal specialty sales force, a contract sales force and a pharmaceutical telesales group. Our internal specialty sales force currently consists of 14 sales professionals who call on neurologists and other prescribers specializing in treating patients with conditions that involve spasticity. Members of this sales force also call on managed care organizations, pharmacists and wholesale drug distribution customers. We plan to expand our specialty sales force to approximately 30 sales professionals in the first quarter of 2006. Our contract sales force is provided by Cardinal Health PTS, LLC, or Cardinal Health, and consists of approximately 160 sales representatives who market Zanaflex Capsules to primary care physicians, on a non-exclusive basis. We also have a contract with Access Worldwide Communications to provide a small, dedicated sales force of pharmaceutical telesales professionals to contact primary care physicians, specialty physicians and pharmacists. Our current sales and marketing infrastructure enables us to reach virtually all high-volume prescribers of Zanaflex tablets and generic tizanidine. We believe that these prescribers are also potential high-volume prescribers for our lead product candidate, Fampridine-SR, if approved.

Fampridine-SR

        Fampridine-SR is an oral,currently in a Phase 3 clinical trial for the improvement of walking ability in people with MS. The trial is being conducted pursuant to a Special Protocol Assessment, or SPA, with the FDA. The FDA has agreed that, if successful, this trial could qualify as one of the pivotal efficacy studies required for drug approval. Fampridine-SR is a small molecule drug contained in a sustained release oral tablet form. Laboratory studies have shown that fampridine, the active molecule ofin Fampridine-SR, improves impulse conduction in nerve fibers in which the insulating outer layer, ofcalled the spinal cord, called myelin sheath, has been damaged. This damage may be caused by physical trauma, in the case of SCI, or by the body's own immune system, in the case of MS. We are developing Fampridine-SR for useMS, or by people with SCI or MS.physical trauma, in the case of SCI.

        Clinical trials of Fampridine-SR are the first, to our knowledge, that have demonstrated improved neurological function in people with chronic SCI or MS. In cooperation with Elan Corporation plc, or Elan, we have conducted a series of clinical trials during the past six years evaluating Fampridine-SR. Approximately 550More than 800 people have been treated with Fampridine-SR in 14over 25 clinical trials, including eightnine clinical trials for SCIin MS and six11 clinical trials for MS.in SCI. In six Phase 2 clinical trials, treatment with Fampridine-SR has been associated with a variety of neurological benefits in people with SCIMS or MS.

        We are currently conducting two Phase 3 clinical trials in people with SCI for the reduction of muscle stiffness, referred to as spasticity, and one lateSCI. In our most recently completed Phase 2 clinical trial, there was a trend toward improvement in the primary endpoint of walking speed and, when analyzed using the same methodology that the FDA has now agreed to in the SPA for our Phase 3 clinical trial, these results are statistically significant. We expect the recruitment period for the current Phase 3 clinical trial, which began in June 2005, to end in February 2006. The treatment period is 14 weeks and the subjects are involved in trial procedures for approximately five months. We expect to be able to evaluate data from this clinical trial in the third quarter of 2006.

        We believe Fampridine-SR is the first potential therapy in late-stage clinical development for MS that seeks to improve the function of damaged nerve fibers, rather than only treating the symptoms of MS or slowing the progression of disease. To our knowledge, there are no current drug therapies that improve walking ability in people with MS for the improvement of walking speed. Our goals are to submit a New Drug Application, or NDA, to the United States Food and Drug Administration, or the FDA, for Fampridine-SR for the treatment of spasticity in SCI in 2004 and for the treatment of lower extremity motor dysfunction in people with MS in 2005.MS. We plan to commercialize Fampridine-SR, if approved, ourselves in the United States, and possibly Canada, and with partners in various other markets throughout the rest of the world. We have received Orphan Drug designation from the FDA for Fampridine-SR for the treatment of both SCI and MS.

        Our second most advanced product candidate is valrocemide, which is currently in Phase 2 clinical trials for the treatment of epilepsy. Valrocemide is a small molecule drug with early Phase 2 clinical evidence of safety and efficacy as an add-on therapy for partial seizures, a type of epilepsy, and pre-clinical evidence of activity in animal models of epilepsy and neuropathic pain. We plan to move valrocemide into late Phase 2 clinical trials for epilepsy and early Phase 2 clinical trials for bipolar disorder in 2004. We may also pursue

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clinical development of valrocemide for the treatment of neuropathic pain. Valrocemide is being co-developed and co-promoted with Teva Pharmaceutical Industries Ltd., or Teva, and its affiliates in the United States.Preclinical programs

        We have three preclinical programs focused on novel approaches to repair damaged components of the CNS:

•

Chondroitinase.  This program is based on the concept of breaking down the matrix of scar tissue that develops as a robust pipelineresult of pre-clinical programs targeting neurological dysfunction. These programs include two distinctan injury to the CNS. Published research has demonstrated that this scar matrix is partly responsible for limiting the regeneration of nerve fibers in the CNS and restricting their ability to modify existing neural connections. Independent academic laboratories have also published animal studies showing that application of chondroitinase results in recovery of function following injuries to various areas of the brain or spinal cord.



•

Neuregulins.  This program is based on using GGF-2, a neuregulin growth factor to stimulate remyelination, or repair of the myelin restoring therapies, Glial Growth Factor 2, which we refer to as GGF-2, and remyelinating antibodies.sheath. In published studies, GGF-2 has been shown in various published studies to stimulate remyelination in animal models of MS and to have a variety of other effects in neural protection and repair. Our remyelinating antibody



•

Remyelinating antibodies.  This program involves monoclonal antibodies thatis based on research performed at Mayo Clinic. Studies have demonstrated the ability of this family of antibodies to stimulate repair of myelinremyelination in three different animal models of MS.

        We believe that all of our preclinical therapies have also developed a chondroitinase program based on the concept of breaking down scar tissue that forms as a result of injury,potential to address conditions for which is believed to limit the regeneration of nerve fibers in the CNS.no effective treatment currently exists. In addition to applicability in MS, SCI and various other CNS disorders, we believe that our preclinical programs also may have initiated a regenerative antibody program to identify novel approaches to stimulate nerve fiber regenerationapplicability in CNS. To support our researchsuch fields as orthopedics, cardiology, oncology and development efforts, we have substantial laboratory capabilities employing both tissue culture methods and predictive animal models of SCI repair. These capabilities allow us to rapidly screen and validate potentially useful therapeutic approaches to SCI.

        Our product development programs include a patent portfolio comprised of 24 U.S. patents and 40 U.S. patent applications and numerous foreign counterparts, of which we are the assignee or have in-licensed.ophthalmology.

Our FocusStrategy

        Our core initial focus on the development of treatments for SCI has led, and we believe will continue to lead, to the identification and development of therapies applicable to other CNS disorders. Since many of the mechanisms of tissue damage and repair in SCI are shared by other conditions, such as MS, stroke and traumatic brain injury, our core technologies have potentially broad applicability for these and other CNS indications.

        Our strategy is to focuscontinue to grow as a fully-integrated biopharmaceutical company focused on the identification, development and marketingcommercialization of a broad range of CNS therapeutics,nervous system therapeutics. We are using our scientific and clinical expertise in MS and SCI as a strategic pointpoints of access. In orderaccess to implement thisadditional CNS markets, including stroke and traumatic brain injury. Key aspects of our strategy we plan to pursue the following initiatives:are to:

•

maximize our revenue opportunity for Zanaflex Capsules;



•

complete the clinical development of, and obtain regulatory approval for Fampridine-SR in SCI, MS and other neurological disorders;MS;



•

completeleverage the clinical developmentcommercial presence of and obtain regulatory approvalZanaflex Capsules for valrocemide in epilepsy, bipolar disorder and other neurological disorders;the potential market launch of Fampridine-SR;



•

continue to develop and advance our pipeline of other product candidates andpreclinical programs to treat neurological disorders;



•

continue to in-license preclinical and clinical programs;



•

expand sales and marketing capabilities;trials; and



•

pursue additional commercial alliances.alliances for approved and development-stage products.

        To keep us apprised of the latest technological advances and help us identify and evaluate business development opportunities, weWe have established an advisory team and network of well-recognized scientists, clinicians and opinion leaders in the fields of SCIMS and MS.SCI. Depending on their expertise, these advisors provide assistance in trial design, conduct clinical trials, keep us apprised of the latest scientific advances and help us identify and evaluate business development opportunities. In addition, we have recruited 80 SCI rehabilitationover 35 MS centers and 24 MS80 SCI rehabilitation centers in the United States and Canada to conduct our clinical trials. Our clinical management team has extensive experience in the areas of SCIMS and MSSCI and works closely with this network.

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        Our business is subject to numerous risks, as more fully described in the section entitled "Risk Factors" immediately following this prospectus summary. We may be unable, for many reasons, including those that are beyond our control, to implement our current business strategy. Those reasons

could include failure to successfully promote Zanaflex Capsules and any other future marketed products; delays in obtaining, or a failure to obtain, regulatory approval for our product candidates; and failure to maintain and to protect our proprietary intellectual property assets, among others. The information about our preclinical and clinical trials may be useful to you in evaluating our company's current stage of development and our near-term and long-term prospects; however, you should note that of the large number of drugs in development only a small percentage successfully complete the FDA regulatory approval process and are commercialized.

        We have a limited operating history and, as of September 30, 2005, had an accumulated deficit of approximately $198.5 million. We expect to incur losses for at least the next several years. We had net losses of $26.0 million and $44.7 million for the nine months ended September 30, 2005 and for the year ended December 31, 2004, respectively. We are unable to predict the extent of future losses or when we will become profitable, if at all. Even if we succeed in promoting Zanaflex Capsules and developing and commercializing one or more of our product candidates, we may never generate sufficient sales revenue to achieve and sustain profitability.

Corporate Information

        We were incorporated in 1995 as a Delaware corporation. Our principal executive offices are located at 15 Skyline Drive, Hawthorne, New York 10532. Our telephone number is (914) 347-4300. Our website iswww.acorda.com. The information on our website is not part of this prospectus.

        "Acorda Therapeutics" is a registered trademark that we own and "Zanaflex" is a registered trademark that we exclusively license. We have pending U.S. trademark applications for our logo and "Zanaflex Capsules." Other trademarks, trade names and service marks used in this prospectus are the property of their respective owners.

THE OFFERING

        The number of shares of common stock to be outstanding after this offering is based on the number of shares outstanding as of JuneSeptember 30, 20032005 and assumesexcludes the following:

•

a one-for-12 reverse stock split that we intend to effect on the date of this prospectus;



•

the automatic conversion of all of our outstanding convertible preferred stock and mandatorily redeemable convertible preferred stock into 15,806,6171,816,518 shares of common stock immediately prior to the consummationissuable, as of this offering; and



•

no exercise of the underwriters' over-allotment option.

        In the table above, the number of shares of common stock outstanding after this offering excludes:

•

1,662,129 shares of common stock issuableSeptember 30, 2005, upon the exercise of outstanding options and warrants to purchase our common stock, at a weighted average exercise price of $6.71$5.13 per share;



•

361,842756,620 shares of restricted stock outstanding as of September 30, 2005;



•

278,339 shares of common stock issuable, as of September 30, 2005, upon the conversion of outstanding convertible promissory notes; and



•

95,0453,000,000 shares of common stock reserved for issuance under our stock option plan.plans, including our 2006 Employee Incentive Plan adopted in January 2006.

5        Unless we specifically state otherwise, all information in this prospectus, including the number of shares of common stock to be outstanding after this offering:

•

assumes the conversion of all outstanding shares of our convertible preferred stock and mandatorily redeemable convertible preferred stock into 13,338,279 shares of our common stock upon the closing of this offering;



•

assumes no exercise by the underwriters of their over-allotment option to purchase up to 825,000 additional shares; and



•

gives effect to the 1-for-1.3 reverse stock split of our common stock on January 11, 2006.

SUMMARY CONSOLIDATED FINANCIAL DATA

        The following table presents a summary of our historical financial information. You should read this information in conjunction with our consolidated financial statements and related notes and the information under "Selected Consolidated Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus.

(1)

The pro forma net loss per share and weighted average shares of common stock used in computing pro forma net loss per share allocable to common stockholders for the We changed our fiscal year endedend from June 30 2003 are calculated as if allto December 31, beginning with the six months ended December 31, 2003.

        Pro forma amounts in the following table reflect the conversion of our outstanding convertible preferred stock and mandatorily redeemable convertible preferred stock were converted into common stock as of the beginning of the year ended June 30, 2003 or from their respective dates of issuance,

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if issued after the beginning of the year. The pro forma net loss per share allocable to common stockholders has been computed assuming the offering was completed at the beginning of the fiscal year presented and has been adjusted to give effect to the following: (a) recognition of the unamortized portion of a beneficial conversion charge of $78.6 million; (b) recognition of the unamortized portion of issuance costs relating to Series E, Series I and Series J preferred stock of $479,000; and (c) reversal of accrued preferred dividends on Series J preferred stock of $630,000 (see Note 2 to the consolidated financial statements).

(2)

The weighted average shares of our common stock outstanding used in computing the pro forma net loss per share allocable to common stockholders is calculated based on the number of (a) Series A through Series I equivalent13,338,279 shares of common stock fromon the beginningclosing of this offering, assuming that shares of our preferred stock were outstanding for the entire periods presented.

																			Nine Months Ended September 30,
													Six Months Ended December 31,
				Year Ended June 30,												Year Ended December 31,
																			2004			2005
				2001			2002			2003			2003			2004			(unaudited)
				(in thousands, except per share data)
Statement of Operations Data:
Gross sales—Zanaflex				$	—		$	—		$	—		$	—		$	—		$	—		$	3,239
	Less: discounts and allowances				—			—			—			—			(4,417	)		(144	)		(992	)
Net sales					—			—			—			—			(4,417	)		(144	)		2,247
Grant revenue					462			132			474			382			479			445			184
Total net revenue					462			132			474			382			(3,938	)		(301	)		2,431
	Less: cost of sales				—			—			—			—			(885	)		(363	)		(2,274	)
Gross profit					462			132			474			382			(4,823	)		(62	)		157
Operating expenses:
	Research and development				6,142			11,147			17,527			16,743			21,999			18,621			9,652
	Research and development—related party				2,223			4,687			2,265			3,343			—			—			—
	Sales and marketing				—			—			—			—			4,662			2,793			9,657
	General and administrative				3,489			6,636			6,388			17,069			13,283			11,034			6,339
		Total operating expenses			11,854			22,470			26,180			37,155			39,944			32,448			25,648
Operating loss					(11,392	)		(22,338	)		(25,706	)		(36,773	)		(44,767	)		(32,510	)		(25,491	)
Other income (expense):
	Interest and amortization of debt discount expense				—			—			(78	)		(38	)		(385	)		(297	)		(824	)
	Interest and amortization of debt discount expense—related party				(443	)		(408	)		(369	)		(184	)		—			—			—
		Interest income			1,824			984			393			276			409			329			347
		Other income			—			—			26			7			2			2			1
		Total other income (expense)			1,381			576			(28	)		61			26			34			(476	)
Minority interest—related party					699			580			—			—			—			—			—
Cumulative effect of change in accounting principle					—			—			—			—			—			—			3
		Net loss			(9,313	)		(21,181	)		(25,734	)		(36,712	)		(44,741	)		(32,476	)		(25,964	)
Beneficial conversion feature, accretion of issuance costs, preferred dividends, and fair value of warrants issued to convertible preferred stockholders					(36	)		(55	)		(24,320	)		(11,985	)		(24,746	)		(18,496	)		(18,636	)
		Net loss allocable to common stockholders		$	(9,349	)	$	(21,236	)	$	(50,054	)	$	(48,697	)	$	(69,487	)	$	(50,972	)	$	(44,600	)
Net loss per share allocable to common stockholders—basic & diluted				$	(50.81	)	$	(111.90	)	$	(261.38	)	$	(252.87	)	$	(351.76	)	$	(259.22	)	$	(221.17	)

													Nine Months Ended September 30,
								Six Months Ended December 31,
		Year Ended June 30,								Year Ended December 31,
													2004		2005
		2001		2002		2003		2003		2004			(unaudited)
Pro forma net loss per share allocable to common stockholders—basic & diluted (unaudited)										$	(9.63	)			$	(1.92	)
Weighted average shares of common stock outstanding used in computing net loss per share allocable to common stockholders—basic & diluted		184		190		191		193			198		197			202
Weighted average shares of common stock outstanding used in computing pro forma net loss per share allocable to common stockholders—basic & diluted (unaudited)											13,536					13,547

        The following table sets forth our cash, cash equivalents and short-term investments and capitalization as of September 30, 2005:

•

on an actual basis giving retroactive effect to the 1-for-1.3 reverse stock split on January 11, 2006;



•

on a pro forma basis to reflect:



•

our entry into a revenue interest assignment arrangement with an affiliate of Paul Royalty Fund, or PRF, on December 23, 2005, including (i) our receipt at signing of a payment in the amount of $15.0 million, (ii) our use of approximately $3.0 million of that payment to repay a portion of the fiscal year; (b) additional equivalent sharesamount we owe to GE Capital and approximately $700,000 of common stock issuable under Series A through Series I, asthat payment to pay fees and expenses related to the transaction, including expenses incurred by PRF, (iii) our recognition of a resultrevenue interest liability of adjustingapproximately $14.6 million, (iv) our recognition of a put/call option liability of approximately $400,000, and (v) our capitalization of approximately $500,000 in fees and expenses related to the transaction; and



•

the automatic conversion prices as a result of anti-dilution provisions as of the date of adjustment; and (c) Series J equivalent shares of common stock issuable from the date of issuance of the Series J preferred stock.

        The pro forma consolidated balance sheet data below reflects the assumed conversionall of our outstanding convertible preferred stock and mandatorily redeemable convertible preferred stock into 15,806,61713,338,279 shares of our common stock upon completionon the closing of this offering. Theoffering; and

•

on a pro forma basis as adjusted consolidated balance sheet data below reflectsto reflect our receipt of net proceeds from the issuance and sale of shares of our common stock in this offering at an assumed initial public offering price of $$12.00 per share (the midpoint of the estimated initial public offering price range)range shown on the cover of this prospectus), after deducting the underwriterunderwriting discounts and commissions and estimated offering expenses.

		June 30, 2003
		Actual			Pro Forma (unaudited)			Pro Forma as Adjusted (unaudited)
		($ in thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents		$	48,319		$	48,319
Restricted cash			253			253
Short-term investments			12,250			12,250
Working capital			58,975			58,975
Total assets			64,807			64,807
Deferred revenue			95			95
Current portion of notes payable			310			310
Non-current portion of notes payable			612			612
Long-term convertible notes payable—principal amount plus accrued interest, less unamortized debt discount—Related party			7,907			7,907
Mandatorily redeemable preferred stock			36,712
Total stockholders' equity		$	16,803		$	53,515

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expenses of $6.7 million.

RISK FACTORS

        An investment in our common stock involves a high degree of risk. You should consider carefully readthe following risk factors and consider the risks described belowother information contained in this prospectus before decidingyou decide to invest inpurchase our common stock. If any of the followingAdditional risks actually occur, our business, financial condition, results of operationthat are not currently known or cash flows could be materially harmed. In any such case, theforeseeable to us may materialize at a future date. The trading price of our common stock could decline if any of these risks or uncertainties occur and you couldmight lose all or part of your investment. When determining whether to buy our common stock, you should also refer to the other information in this prospectus, including our consolidated financial statements and the related notes.

Risks Related To Our Business

We have a history of operating losses and we expect to continue to incur losses and may never be profitableprofitable.

        As of JuneSeptember 30, 2003,2005, we had an accumulated deficit of approximately $91.1$198.5 million. AsWe had net losses of $26.0 million and $44.7 million for the nine months ended September 30, 2005, and the year ended December 31, 2004, respectively. We have had operating losses since inception as a result of our significant clinical development, research and development, clinical development, general and administrative, sales and marketing and business development expenses and the lack of any products to generate revenue, we have generated operating losses since our inception.expenses. We expect to continue to incur losses for at least the next several years and expect that our losses will increase as we expand our sales and marketing capabilities and continue our clinical trials and research and development activities and incur significant clinical testing costs. To date, our working capital has primarily been generated through financing activities consisting of the sale of shares of our preferred stock and the issuance of convertible debt securities.activities.

        Our prospects for achieving profitability will depend primarily on how successful we are in executing our business plan to:

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market and sell Zanaflex Capsules;



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obtain FDA approval for our late-stage product candidates;



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market and commercialize our late-stage product candidates;Fampridine-SR;



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continue to develop our preclinical product candidates and test our other existing product candidates;advance them into clinical trials; and



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attract in-licensing and other business development opportunities,enter into strategic partnerships and collaborative arrangements.collaboration arrangements related to our drug discovery programs and product candidates.

We cannot assure you when or if        If we will beare not successful in executing our business plan. If we are not successful,plan, we may never generate revenuesachieve or achievemay not sustain profitability.

The resultsWe will be substantially dependent on sales of our late stage clinical trials may be insufficientone product, Zanaflex Capsules, to obtain FDA approvalgenerate revenue for the foreseeable future.

        Positive resultsWe currently derive substantially all of our revenue from preclinical studiesthe sale of Zanaflex Capsules and early clinical trialsZanaflex tablets, which are our only FDA-approved products. Although we currently distribute Zanaflex tablets, our marketing efforts are focused on Zanaflex Capsules and we do not, ensure positive results in more advanced clinical trials.and do not intend to, actively promote Zanaflex tablets. As a result, prescriptions for Zanaflex tablets have declined and we expect that they will continue to decline. Our goal is to convert sales of Zanaflex tablets and generic tizanidine tablets to sales of Zanaflex Capsules. We believe that sales of Zanaflex Capsules will constitute a significant portion of our total revenue for the foreseeable future. If we are unable to demonstrateconvert tablet sales to capsule sales or are otherwise unable to increase our revenue from the sale of this product, our business, financial condition and results of operations could be adversely affected.

If we are unable to successfully differentiate Zanaflex Capsules from both Zanaflex tablets and generic tizanidine tablets we may not be able to increase sales of Zanaflex Capsules.

        There are currently 11 generic versions of tizanidine tablets on the market and they are significantly cheaper than either Zanaflex Capsules or Zanaflex tablets. In 2004, these generic versions of tizanidine tablets constituted 95% of tizanidine sales in the United States. Although Zanaflex Capsules have a different pharmacokinetic profile when taken with food and are available in a higher dose than Zanaflex tablets and their generic equivalents, we may be unsuccessful in convincing prescribers, patients and third-party payors that athese differences justify the higher price of Zanaflex Capsules. Prescribers may prescribe generic tizanidine tablets instead of Zanaflex Capsules, and third-party payors may establish unfavorable reimbursement policies for Zanaflex Capsules or otherwise seek to encourage patients and prescribers to use generic tizanidine tablets instead of Zanaflex Capsules. In

addition, although the FDA has determined that neither Zanaflex tablets nor generic tizanidine tablets are therapeutically equivalent, or "AB-rated," to Zanaflex Capsules, it is possible that pharmacists may improperly fill prescriptions with generic tizanidine tablets or may seek to influence patients or physicians to change prescriptions from Zanaflex Capsules to generic tizanidine tablets. If we are unable to successfully differentiate Zanaflex Capsules from Zanaflex tablets and generic tizanidine tablets in the minds of prescribers, pharmacists, patients and third-party payors, our ability to generate meaningful revenue from this product candidate will be safeadversely affected.

Our company has limited sales and marketing experience and we may not be successful in building an effective sales and marketing organization to market Zanaflex Capsules to specialty physicians.

        As a company, we have limited sales and marketing experience, having only launched Zanaflex Capsules in advanced clinical trials involving larger numbers of patients,April 2005. In order to successfully commercialize Zanaflex Capsules or any other products that we may bring to market, we will be unable to submit the NDA, necessary to receive approval from the FDA to commercialize that product.

        Fampridine-SR is currently in Phase 3 clinical trials for the treatment of spasticity in SCI. We expectneed to have results from the Phase 3 clinical trials by the endadequate sales, marketing and distribution capabilities. Although we plan to expand our internal specialty sales force of 14 persons to approximately 30 persons in the first quarter of 2006, we may need to further expand that sales force in the future. We may not be able to attract and train skilled sales and marketing personnel, in a timely manner or at all, or integrate and manage a growing sales and marketing organization.

Returns of Zanaflex tablets may adversely affect our results of operations.

        Prior to the launch of generic tizanidine tablets in June 2002, wholesalers established larger than normal inventories of Zanaflex tablets. These inventories had expiration dates that extended to June 2005. Our return policy is to accept returns for six months before and 12 months after the product's expiration date. According to our Zanaflex asset purchase agreement with Elan, we are responsible for all returns of Zanaflex tablets after January 17, 2005. Zanaflex tablets sold by Elan can be returned to us through June 2006. In the year ended December 31, 2004, and expectwe took a $4.1 million charge to file our NDA shortly thereafter.establish a reserve for expected returns of Zanaflex tablets sold by Elan. This charge is an estimate. If returns for products not sold by us are higher than we fail to achieve the primary endpoints in our Phase 3 clinical trials or the results are ambiguous,have estimated, we will have to determine whether to redesignrecord additional charges, which will adversely affect our Fampridine-SR in SCI development program and protocols and continue with additional testing, or cease activities in this area. Redesigning the program could be extremely costly and time-consuming. A substantial delay in obtaining FDA approval or terminationresults of the Fampridine-SR SCI program could result in a delay in our ability to generate revenue. We face the same risk of failure to meet our primary endpoints with respect to our Fampridine-SR in MS and valrocemide clinical trial programs.operations.

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Our product candidates must undergo rigorous clinical testing, the results of which are in various stages of developmentuncertain and may not be successfully developedcould substantially delay or commercializedprevent us from bringing them to market.

        We currently do not sell any products. We are subjectBefore we can obtain regulatory approval for a product candidate, we must undertake extensive clinical testing in humans to demonstrate safety and efficacy to the risk that some or allsatisfaction of our product candidates:

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will be found to be ineffective or unsafe;



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will not receive necessarythe FDA and other regulatory approvals;



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will be unable to get to market in a timely manner;



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will not be capableagencies. Clinical trials of being produced in commercial quantities at reasonable costs;



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will not be successfully marketed;



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will be subject to post-market evaluations resulting in marketing restrictions or withdrawal of our product; or



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will not be accepted by the patient and physician community.

        We cannot predict whether we will successfully develop and commercialize any of ournew product candidates sufficient to obtain regulatory marketing approval are expensive and take years to complete, and the failure to do so would result in our inability to generate revenue.

If the FDA does not accept the measure we are using in our clinicaloutcome of such trials for Fampridine-SR in MS, FDA approval for treatment of patients with MS will be significantly delayedis uncertain.

        We are using the Timed 25 Foot Walk to measure improvement in walking speed in people taking Fampridine-SR for MS in our Phase 2 clinical trials. To our knowledge, the FDA has not approved a drug based on this measure to date. Although the resultsClinical development of our Phase 2 clinical testing may demonstrate a statistically significant, clinically meaningful benefit to patients when using Fampridine-SR in MS, the FDA may decide that the Timed 25 Foot Walk is an insufficient measure to determine whether this product should receive FDA approval, and may require us to re-design our clinical trials using different measures. If we are required to identify new measures to test our primary endpoints, we will face substantial delays in our current timeline to commercialize and launch Fampridine-SR in MS and will incur additional costs associated with these activities. Any delays in regulatory approval will delay commercialization of Fampridine-SR in MS, which would harm our business prospects.

Our other product candidates are in early stages of development and may never be commercialized

        Research, development and pre-clinical testing are long, expensive and uncertain processes. Other than Fampridine-SR and valrocemide, none of our other product candidates have reached clinical trial testing. Our GGF-2any product candidate and our remyelinating antibodies are in pre-clinical testing. Our chondroitinase and regenerative antibodies programs are in the research stage. Our future success depends, in part, on our abilitythat we determine to complete pre-clinical development of our other product candidates and advance them to thetake into clinical trials.

        Our product development programstrials may be curtailed, redirected, delayed or eliminated at any time for some or all of the following reasons:

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adversenegative or ambiguous results;results regarding the efficacy of the product candidate;



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undesirable side effects whichthat delay or extend the trials;trials, or other unforeseen or undesirable safety issues that make the product candidate not medically or commercially viable;



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inability to locate, recruit and qualify a sufficient number of patients for our trials;



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difficulty in determining meaningful end points or other measurements of success in our clinical trials;



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regulatory delays or other regulatory actions;actions, including changes in regulatory requirements;



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difficulties in obtaining sufficient quantities of the particular product candidate manufactured under current good manufacturing practices;



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delays, suspension or any other components neededtermination of the trials imposed by us, an independent institutional review board for our preclinical testinga clinical trial site, or clinical trials;holds placed upon the trials by the FDA;



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FDA approval of new drugs that are more effective than our product candidates;

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change in the focus of our development efforts; and



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efforts or a re-evaluation of our clinical development strategy.strategy; and



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a change in our financial position.

        A delay in or termination of any of our clinical development programs could have an adverse effect on our business.

If our Phase 3 clinical trials of Fampridine-SR are unsuccessful, or if we are unable to obtain regulatory approval for this product candidate or any approval is unduly limited in scope, our business prospects will be adversely affected.

        In June 2005, we initiated a Phase 3 clinical trial for Fampridine-SR for the improvement of walking ability in patients with MS. In April 2004, we released results from a Phase 2 clinical trial designed to assess the relative safety and efficacy of varying doses of Fampridine-SR in MS. Our results did not reach statistical significance for the primary endpoint in this trial. Although we have designed the current Phase 3 clinical trial to address the difficulties we encountered in interpreting the patient data from the earlier trial, we cannot be sure that the results from our current clinical trial will be statistically significant.

        To achieve the primary endpoint in our current Phase 3 clinical trial for MS, we need to show statistical improvement in the walking speed of the patients in the trial and that this improvement is both sustained and clinically meaningful to these patients. If we fail to achieve the primary endpoint in this clinical trial or the results are ambiguous, we will have to determine whether to re-design our MS trial and protocols and continue with additional testing, or cease development activities in this area. Redesigning the program could be extremely costly and time-consuming. Even if we are able to achieve the primary endpoint, we will need positive results from at least one other clinical trial to support the filing of a new drug application, or NDA, with the FDA. We cannot predict how long the second trial, or any additional trial that might be required by the FDA, will take or what the cost will be.

        Our Phase 3 clinical trial for Fampridine-SR in MS is being conducted pursuant to a special protocol assessment, or SPA, with the FDA and the FDA has agreed that, if successful, this trial could qualify as one of the pivotal trials needed to support regulatory approval. This SPA may not be changed by either us or the FDA. However, if the FDA determines that a substantial scientific issue essential to determining the safety or efficacy of Fampridine-SR is identified after the trial began, the FDA may alter its conclusion on the adequacy of the protocol. In addition, even if the SPA remains in place and the trial meets its primary endpoint, the FDA could determine that the overall balance of risks and benefits for Fampridine-SR is not adequate to support approval, or only justifies approval for a narrow set of uses or approval with restricted distribution or other burdensome post-approval requirements and limitations. If the FDA denies approval of Fampridine-SR in MS, FDA approval is substantially delayed, approval is granted on a narrow basis or with restricted distribution or other burdensome post-approval requirements, or if the Fampridine-SR program is terminated, our business prospects will be adversely affected.

        In March 2004, we completed two Phase 3 clinical trials of Fampridine-SR in SCI in which our results failed to reach their primary endpoints. We expect to resume development of Fampridine-SR for SCI after we have completed further development of the drug for MS. We cannot predict whether future clinical trials of Fampridine-SR in SCI will achieve their primary endpoints, how long these clinical trials will take or how much they will cost.

Our other drug development programs are in early stages of development and may never be commercialized.

        All of our development programs other than Fampridine-SR are in the preclinical phase. Our future success depends, in part, on our ability to select promising product candidates, complete preclinical development of these product candidates and advance them to clinical trials. These product candidates will require significant development, preclinical studies and clinical trials, regulatory clearances and substantial additional investment before they can be commercialized.

        Our preclinical programs may not lead to commercially viable products for several reasons. For example, we may fail to identify promising product candidates, our product candidates may fail to be safe and effective in preclinical tests or clinical trials, or we may have inadequate financial or other resources to pursue discovery and development efforts for new product candidates. In addition, because we have limited resources, we are focusing on product candidates that we believe are the most promising. As a result, we may delay or forego pursuit of opportunities with other product candidates. From time to time, we may establish and announce certain development goals for our product candidates and programs; however, given the complex nature of the drug discovery and development process, it is difficult to predict accurately if and when we will achieve these goals. If we are unsuccessful in advancing our early stage product candidatespreclinical programs into clinical testing for any reason,or in obtaining regulatory approval, our long-term business prospects will be harmed.

The pharmaceutical industry is subject to stringent regulation and failure to obtain regulatory approval will prevent commercialization of our product candidates.

Our research, development, preclinical and clinical trial activities, as well as the manufacture and marketing of any products that we may successfully develop, are subject to an extensive regulatory approval process by the FDA and other regulatory agencies abroad. The process of obtaining required regulatory approvals for drugs is lengthy, expensive and uncertain, and any regulatory approvals may contain limitations on the indicated usage of a drug, distribution restrictions or may be conditioned on burdensome post-approval study or other requirements, including the requirement that we institute and follow a special risk management plan to monitor and manage potential safety issues, all of which may eliminate or reduce the drug's market potential. Post-market evaluation of a product could result in marketing restrictions or withdrawal from the market.

        The results of preclinical and Phase 1 and Phase 2 clinical studies are not necessarily indicative of whether a product will demonstrate safety and efficacy in larger patient populations, as evaluated in Phase 3 clinical trials. Additional adverse events that could impact commercial success, or even continued regulatory approval, might emerge with more extensive post-approval patient use. Of the large number of drugs in development, only a small percentage result in the submission of an NDA to the FDA and even fewer are approved for commercialization.

        In order to conduct clinical trials to obtain FDA approval to commercialize any product candidate, an IND application must first be submitted to the FDA and must become effective before clinical trials may begin. Subsequently, an NDA must be submitted to the FDA, including the results of adequate and well-controlled clinical trials demonstrating, among other things, that the product candidate is safe and effective for use in humans for each target indication. In addition, the manufacturing facilities used to produce the products must comply with current good manufacturing practices and must pass a pre-approval FDA inspection. Extensive submissions of preclinical and clinical trial data are required to demonstrate the safety, efficacy, potency and purity for each intended use. The FDA may refuse to accept our regulatory submissions for filing if they are incomplete.

        Clinical trials are subject to oversight by institutional review boards and the FDA to ensure compliance with the FDA's good clinical practice requirements, as well as other requirements for the protection of clinical trial participants. We depend, in part, on third-party laboratories and medical institutions to conduct preclinical studies and clinical trials for our products and other third-party organizations to perform data collection and analysis, all of which must maintain both good laboratory and good clinical practices required by regulators. If any such standards are not complied with in our clinical trials, the resulting data from the clinical trial may not be usable or we, an institutional review board or the FDA may suspend or terminate such trial, which would severely delay our development and possibly end the development of such product candidate. We also depend upon third party manufacturers of our products to qualify for FDA approval and to comply with good manufacturing practices required by regulators. We cannot be certain that our present or future manufacturers and suppliers will comply with current good manufacturing practices. The failure to comply with good

manufacturing practices may result in the termination of clinical studies, restrictions in the sale of, or withdrawal of the products from the market. Compliance by third parties with these standards and practices is outside of our direct control.

        In addition, we are subject to regulation under other state and federal laws, including requirements regarding occupational safety, laboratory practices, environmental protection and hazardous substance control, and may be subject to other local, state, federal and foreign regulations. We cannot predict the impact of such regulations on us, although it could impose significant restrictions on our business and additional expenses to comply with these regulations.

Our products and product candidates may not gain market acceptance among physicians, patients and the medical community, thereby limiting our potential to generate revenue.

        Even if we obtain regulatory approval forMarket acceptance of our products market acceptanceand product candidates will depend on our ability to demonstrate to physicians and patients the benefits of our products in terms of safety, efficacy, convenience, ease of administration and cost effectiveness. In addition, weeffectiveness and our ability to demonstrate these benefits to physicians and patients. We believe market acceptance also depends on the effectiveness of our marketing strategy, the pricing of our products and the reimbursement policies of government and third-party payors.payors, as well as on the effectiveness of our sales and marketing activities. Physicians may not prescribe our products, and patients may determine, for any reason, that our product isproducts are not useful to them. IfFor example, physicians may not believe that the benefits of Zanaflex Capsules outweigh their higher cost in relation to Zanaflex tablets or generic tizanidine tablets. The failure of any of our products or product candidates, failsonce approved, to achieve market acceptance would limit our ability to generate revenue will be limited.and would adversely affect our results of operations.

If we fail to meet our obligations under our license agreements, or our agreements are terminated for any other reasons, weOur potential products may lose our rights to in-licensed technologies

        We have licensed the rights for most of our products. We could lose the rights to Fampridine-SR, for example, in certain countriesnot be commercially viable if we fail to file regulatory approvalsobtain an adequate level of reimbursement for these products by Medicaid, Medicare or launch a productother third-party payors.

        Our commercial success will depend in part on third-party payors, such countries within specified periods, or if we failas government health administrative authorities, including Medicaid and Medicare, private health insurers and other such organizations, agreeing to fulfillreimburse patients for the cost of our payment obligations underproducts. Significant uncertainty exists as to the license agreement. Furthermore, if Elan were to file for bankruptcy in Ireland, there is the possibility that our licensed rights could be transferred, altered or terminated, or we could incur substantial expenses to keep our license effective. If we lose our rights to Fampridine-SR, ourreimbursement status of newly-approved healthcare products. Our business and prospects would be materially harmed.adversely affected if the Medicaid program, Medicare program or other third-party payors were to deny reimbursement for our products or provide reimbursement only on unfavorable terms. Our business could also be adversely affected if the Medicaid program, Medicare program or other reimbursing bodies or payors limit the indications for which our products will be reimbursed to a smaller set of indications than we believe is appropriate.

        Third-party payors frequently require that drug companies negotiate agreements with them that provide discounts or rebates from list prices. At present we do not have any such agreements with private third-party payors and only a small number of such agreements with government payors. If sales of Zanaflex Capsules increase we may need to offer larger discounts or discounts to a greater number of third-party payors to maintain acceptable reimbursement levels. If we were required to negotiate such agreements, there is no guarantee that we would be able to negotiate them at price levels that are profitable to us, or at all. If we are unsuccessful in maintaining reimbursement for our products at acceptable levels, our business will be adversely affected. In addition, if our competitors reduce the prices of their products, or otherwise demonstrate that they are better or more cost effective than our products, this may result in a greater level of reimbursement for their products relative to our products, which would reduce our sales and adversely affect our results of operations.

We may experience pressure to lower prices on our approved products due to new and/or proposed federal legislation.

        Federal legislation enacted in December 2003 added an outpatient prescription drug benefit to Medicare, effective January 2006. In the interim, Congress has established a discount drug card program for Medicare beneficiaries. Both benefits will be provided primarily through private entities,

which will attempt to negotiate price concessions from pharmaceutical manufacturers. These negotiations may increase pressure to lower prescription drug prices. While the new law specifically prohibits the U.S. government from interfering in price negotiations between manufacturers and Medicare drug plan sponsors, some members of Congress are pursuing legislation that would permit the U.S. government to use its enormous purchasing power to demand discounts from pharmaceutical companies, thereby creating de facto price controls on prescription drugs. In addition, the new law contains triggers for Congressional consideration of cost containment measures for Medicare in the event Medicare cost increases exceed a certain level. These cost containment measures could include limitations on prescription drug prices. This Medicare prescription drug coverage legislation, as well as additional healthcare legislation that may be enacted at a future date, could reduce our sales and adversely affect our results of operations.

If our competitors develop and market products that are more effective, safer or more convenient than our approved products, or obtain marketing approval before we obtain approval of future products, our commercial opportunity will be reduced or eliminated.

        Competition in the pharmaceutical and biotechnology industries is intense and is expected to increase. Composition of matter patents on tizanidine, the active ingredient in Zanaflex Capsules and Zanaflex tablets, expired in 2002. There are currently 11 generic versions of tizanidine tablets on the market. To the extent that we are not able to differentiate Zanaflex Capsules from Zanaflex tablets and generic tizanidine tablets and/or pharmacists improperly substitute generic tizanidine tablets when filling prescriptions for Zanaflex Capsules, we may be unable to convert a meaningful amount of sales of Zanaflex tablets and generic tizanidine tablets to Zanaflex Capsules and our ability to generate revenue from this product will be adversely affected. Although no other FDA-approved capsule formulation of tizanidine exists, another company could develop a capsule or other formulation of tizanidine that competes with Zanaflex Capsules.

        Many biotechnology and pharmaceutical companies, as well as academic laboratories, are involved in research and/or product development for various neurological diseases, including MS and SCI. We are aware of a company developing a sodium/potassium channel blocker and a second company developing an immediate release form of fampridine, both of which may compete with Fampridine-SR, if approved. In certain circumstances, pharmacists are not prohibited from formulating certain drug compounds to fill prescriptions on an individual patient basis. We are aware that at present compounded fampridine is used by some people with MS or SCI and it is possible that some people will want to continue to use compounded formulations even if Fampridine-SR is approved. Several companies are engaged in developing products that include novel immune system approaches and cell transplant approaches to remyelination for the treatment of people with MS. These programs are in early stages of development and may compete in the future with Fampridine-SR or our preclinical candidates.

        Our rights tocompetitors may succeed in developing products that are more effective, safer or more convenient than our products or the ones we have under development use and marketing of all ofor that render our otherapproved or proposed products or technologies noncompetitive or obsolete. In addition, our competitors may achieve product candidates are also governed by license agreements thatcommercialization before we entered into with licensors of these technologies. Our failure to achieve milestones, or meetdo. If any of our financialcompetitors develops a product that is more effective, safer or more convenient for patients, or is able to obtain FDA approval for commercialization before we do, we may not be able to achieve market acceptance for our products, which would adversely affect our ability to generate revenues and recover the substantial development costs we have incurred and will continue to incur.

        Our products may be subject to competition from lower-priced versions of such products and competing products imported into the United States from Canada, Mexico and other countries where there are government price controls or other obligations under these license agreementsmarket dynamics that make the products lower priced.

Our operations could result in the loss ofbe curtailed if we are unable to obtain any necessary additional financing on favorable terms or at all.

        On September 30, 2005, on a pro forma as-adjusted basis after giving effect to this offering and our rights to these technologies. If we loseentry into our rights under any of these license agreements,revenue interest assignment arrangement with PRF, we would have had approximately $79.5 million in cash, cash equivalents and short-term investments. Although we anticipate this will be unablesufficient to fund our operations for approximately the next 24 months, we have several product candidates in various stages of development, and all will require significant further investment to develop, test and obtain regulatory approval prior to commercialization. We will likely need to seek additional equity or debt financing or strategic collaborations to continue our product development programs, whichactivities, and could require substantial funding to commercialize any products that we successfully develop. We may not be able to raise additional capital on favorable terms or at all.

        To the extent that we are able to raise additional capital through the sale of equity securities, the issuance of those securities would result in lost revenuedilution to our stockholders. Holders of such new equity securities may also have rights, preference or privileges that are senior to yours. If additional capital is raised through the incurrence of indebtedness, we may become subject to various restrictions and would harmcovenants that could limit our ability to respond to market conditions, provide for unanticipated capital investments or take advantage of business prospects.

We depend upon Elan foropportunities. To the manufactureextent funding is raised through collaborations or intellectual property-based financings, we may be required to give up some or all of Fampridine-SR,the rights and other manufacturers for the manufacturerelated intellectual property to one or more of our otherproducts, product candidates

        Our supply agreement with Elan obligates us to purchase at least 75% of our yearly supply of Fampridine-SR from Elan. We are in the process of qualifying a second manufacturing source in the event that Elan is unable or unwilling, due to financial difficulties or otherwise, to fulfill our manufacturing and supply needs.preclinical programs. If we are unable to qualify a second manufacturing source,obtain sufficient financing on favorable terms when and Elan ceasesif needed, we may be required to manufacture the product for us, we could experience substantial delays before we are able to qualify another supplier. Any significant delays in product shipments could slow the current progressreduce, defer or discontinue one or more of our clinical trials and, ifproduct development programs or devote fewer resources to marketing Zanaflex Capsules.

Under our financing arrangement with PRF, upon the occurrence of certain events, PRF may require us to repurchase the right to receive revenues that we receive approvalassigned to commercialize Fampridine-SR, would materiallyit or may foreclose on certain assets that secure our obligations to PRF. Any exercise by PRF of its right to cause us to repurchase the assigned right or any foreclosure by PRF could adversely affect our ability to commercialize Fampridine-SR. In addition, if we do not purchase at least 100%results of operations and our requirements from Elan under the supply agreement we are required to make certain compensatory payments to Elan which could increase our total manufacturing costs.

        We are also substantially dependent upon Elan to complete the chemistry, manufacturing and controls section of the NDA for Fampridine-SR in SCI. If Elan fails to provide this section in a complete and timely manner we could incur delays in filing our NDA for Fampridine-SR in SCI.

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