NEW YORK (Reuters) - Acorda Therapeutics Inc. on Monday said it will seek U.S. approval early next year for the first medicine to improve walking for patients with multiple sclerosis.

The tiny U.S. biotechnology company said its decision to file the marketing application was based on favorable results from a second-late stage study of the medicine. Data on the product, which is being developed in partnership with Irish drugmaker Elan Corp , were unveiled early on Monday.

The latest trial involved 240 MS patients in the United States and Canada with some degree of walking disability, divided into groups that either took the Acorda medicine or placebos twice daily.

Almost 43 percent of patients taking the medicine, called fampridine, showed consistent improvement in walking speed during the 2-month study, compared with 9.3 percent of patients taking placebos, Acorda said.

The results were highly statistically significant and similar to those seen in an earlier 14-week study of the medicine. Patients who responded to the medicine in both phase III studies, on average, required about 25 percent less time to walk a distance of 25 feet.

Moreover, leg strength improved by a statistically significant degree among the fampridine group in the latest trial, meeting a secondary goal of the study.

"There is no approved treatment today that addresses walking disability for patients with multiple sclerosis," Ron Cohen, Acorda's chief executive, said in an interview late on Sunday.

"Walking disability is a fundamental feature of multiple sclerosis and one of the most worrisome features because it can imply loss of independence," said Cohen, whose company is based in Hawthorne, New York.

Cohen cautioned that although fampridine appears to help improve mobility of patients, it does not slow the progression of MS. Therefore, he said it will likely be used alongside standard interferon treatments that do slow progression, which include Biogen Idec Inc's Avonex and the newer treatment Tysabri developed by Biogen Idec and Elan.

He noted, however, that the interferon treatments have not been shown to improve walking abilities, as fampridine has done.

Acorda said side effects of fampridine were generally mild to moderate, although significantly more patients taking the drug developed urinary tract infections, insomnia, headache, nausea and dizziness than those receiving placebos.

JP Morgan analyst Geoffrey Meacham said one of the biggest risks to the Acorda drug was that it might increase the risk of seizures - a side effect hinted at in the earlier phase III study. But he said that risk did not materialize, boosting his faith in the drug's future.

Multiple sclerosis is a progressive disease in which the immune system attacks a protective layer of protein called myelin that insulates nerve fibers in the brain and spinal cord. Fampridine works by preventing potassium from leaking from nerve fibers whose myelin sheath has been denuded.

More than 400,000 Americans are estimated to have the disease, a high percentage of whom eventually develop walking difficulties or related motor problems.