Acorda Therapeutics, Inc.
) recently completed the acquisition of privately-held Neuronex,
Inc. As per the agreement terms, Acorda paid $6.8 million to
The acquisition of Neuronex adds diazepam nasal spray to
Acorda's neurology pipeline. Currently, Acorda is preparing to
submit a 505(b)(2) type new drug application (NDA) for diazepam
nasal spray for the management of seizure in certain epilepsy
patients. The company plans to submit the regulatory application
to the FDA in 2013.
At the time of announcing the acquisition agreement (February
2012), Acorda had made an upfront payment of $2 million. Acorda
also provided research funding of $1.5 million since then.
The company is further obligated to make milestone payments of
$18 million and $105 million depending on certain regulatory and
manufacturing-related goals and sales targets. Acorda will also
pay Neuronex royalties (tiered upper single-digit to lower
double-digit) on diazepam nasal spray sales. Moreover, Acorda
will also pay regulatory and sales milestone payments to third
parties, up to $11 million, and single-digit royalties.
Though sales of the company's key product Ampyra have improved
in the past few quarters, it remains to be seen whether the
performance is sustainable. Moreover, we remain concerned about
the company's dependence on Ampyra for growth. We prefer to
remain on the sidelines until we see a sustained improvement in
Ampyra's performance. Thus, we maintain a Neutral recommendation
on Acorda. The stock carries a Zacks #3 Rank (Hold) in the short
Pharma stocks that currently look attractive include companies
). Each of these companies carries a Zacks #2 Rank (Buy).
ACORDA THERAPT (ACOR): Free Stock Analysis
ALLERGAN INC (AGN): Free Stock Analysis
ASTRAZENECA PLC (AZN): Free Stock Analysis
NOVO-NORDISK AS (NVO): Free Stock Analysis
To read this article on Zacks.com click here.