Alcobra ADHD drug meets goals, after data excluded; stock tanks

(Adds conference call details; CEO , analyst comments; updates shares)

By Vidya L Nathan

Oct 6 (Reuters) - Alcobra Ltd (NasdaqGM: ADHD - news) lost more than half its market value after it said its drug to treat adult attention deficit disorder met the main goals of a late-stage trial - but only after excluding data from patients who reacted positively to a placebo.

Alcobra's stock was the biggest loser on the Nasdaq as the results also made it less likely the company would be bought.

"There was a belief that if this study worked out with a statistically significant outcome, the company could have been sold long before the next phase 3 study," Roth Capital Partners LLC's Debjit Chattopadhyay told Reuters.

Alcobra's shares fell about 53 percent to a low of $6.57, wiping out almost $100 million of market capitalization.

Alcobra CEO Yaron Daniely confirmed to Reuters that the company had been in discussions on a deal with several parties since it released early phase 2 studies in December 2012.

A positive study on an ADHD drug prompted Shire Plc (Xetra: S7E.DE - news) to buy New River Pharmaceuticals for $2.6 billion in 2007.

Alcobra's drug, Metadoxine, was tested in 300 patients as a treatment for attention deficit hyperactivity disorder, or ADHD - a common neurobiological condition in adults.

ADHD, which is usually diagnosed in childhood, persists into adulthood in about 60 percent of cases. About 4-5 percent adults worldwide suffer from ADHD, according to the U.S. Centers for Disease Control and Prevention.

The Israeli company said patients given Metadoxine showed statistically significant improvement in symptoms to those given a placebo based on results scored on a scale commonly used to evaluate ADHD drugs.

However, the results excluded data for "four subjects with extreme placebo responses," Alcobra said.

Alcobra said it would meet with the U.S. Food and Drug Administration to discuss how to move forward with the drug's development. The company is testing the drug in children and adolescents in two other late-stage studies.

Daniely was optimistic.

"If there is rationale for moving forward and confirmatory evidence then the FDA is not particularly against looking at subscale and subgroups of data," he said.

The current treatment for ADHD involves a class of drugs called psychostimulants, which lets nerve cells communicate better with each other.

Psychostimulants can be abused and come with warning that limits the number of patients that can be given the drug.

Alcobra's Metadoxine is not a psychostimulant. Instead, a slow release of the drug works by modulating gamma-aminobutyric acid, a key chemical that reduces nerve stimulation.

The only other approved non-stimulant, Straterra, is made by Eli Lilly and Co. It was approved with a warning of an increased risk of suicidal thoughts in children or adolescents.

Shire's ADHD treatments, Vynase and Adderall - both psychostimulants - generated sales of $710.7 million and $184.9 million respectively in the first half of the year.

Johnson & Johnson (NYSE: JNJ - news) 's Concerta, also a psychostimulant, brought in sales of about $295 million. (Reporting by Vidya L Nathan in Bangalore; Editing by Savio D'Souza and Ted Kerr)