We recently initiated coverage on commercial-stage
Acorda Therapeutics, Inc.
) with a Neutral recommendation and a target price of $25.00.
Ardsley, New York based Acorda is focused on the development
and commercialization of novel treatments that improve
neurological function in people suffering from multiple
sclerosis, spinal cord injury and other nervous system
The January 2010 FDA approval of Ampyra was a major
achievement for Acorda. According to the company, Ampyra is the
first and only product approved for the improvement of walking in
multiple sclerosis patients. Ampyra is the key growth driver at
Acorda. The company expects net Ampyra revenue in the range of
$255 million to $275 million in 2012. Ampyra has the potential to
be approved for additional indications as well. Acorda is
currently studying Ampyra in phase II proof-of-concept studies
for cerebral palsy (results by year end) and post-stroke deficits
(results in early 2013).
We are positive on Acorda's June 2009 agreement with
) for the development and commercialization of Fampyra (ex-US
trade name of Ampyra) in ex-US markets. In addition to receiving
an upfront payment of $110 million, Acorda is entitled to receive
milestone payments as well as double-digit tiered royalties.
Given Biogen's expertise and strong presence in the multiple
sclerosis market, we believe Biogen is a suitable partner for
While we are pleased with the approval of Ampyra, we remain
concerned about the company's dependence on the product for
growth. Zanaflex, another marketed product in Acorda's portfolio,
is facing generic competition and will remain a negligible
contributor to sales. Moreover, Ampyra sales have not really
lived up to expectations. Sales were disappointing in the first
quarter of 2012. Although performance improved in the second
quarter of 2012, it remains to be seen whether the same is
sustainable. Unfavorable reimbursement and pricing issues in the
EU could also affect Fampyra royalties.
Besides being concerned about the company's over-dependence on
Ampyra, we remain concerned about the early-stage nature of the
pipeline. Although the company has some interesting candidates in
its pipeline, it will be several years before any of these
candidates are close to commercialization.
We prefer to remain on the sidelines until we see a sustained
improvement in Ampyra sales. Acorda carries a Zacks #3 Rank
(short-term 'Hold' rating).
ACORDA THERAPT (ACOR): Free Stock Analysis
BIOGEN IDEC INC (BIIB): Free Stock Analysis
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