Acorda Therapeutics Stock Forecast: When it comes to pharmaceutical stocks – and biopharma companies in particular – it can be difficult to know where you want to put your money.
Unlike Big Pharma, biopharmaceutical companies tend to have fairly small product portfolios that emphasize the treatment of a particular family of conditions or that leverage a certain platform for discovering new treatments.
Before you buy any share in this type of company, do your research, and evaluate where you think the company is headed. Let’s do that for Acorda Therapeutics.
What Does Acorda Therapeutics Do?
– INBRIJA: This is a levodopa inhalation powder. It brought in $5 million in 3Q19, but the drug is very new.
Acorda expects that an increasing number of physicians will begin prescribing the product. INBRIJA is an inhaled drug that Parkinson’s patients use as needed during OFF episodes while receiving a carbidopa or levodopa treatment. INBRIJA does not replace those treatments.
– AMPYRA: Also called dalfampridine, this drug is expected to bring in over $140 million in fiscal 2019 per the company’s 3Q19 report. The FDA approved this drug as a treatment to help adults with multiple sclerosis (MS) improve their abilities to walk.
However, it has several other promising drugs in its development pipeline.
– BTT1023: Also called timolumab, this drug is monoclonal antibody. It specifically targets VAP-1, a vascular adhesion protein. Early studies suggest VAP-1 could play a role in inflammatory diseases, such as rheumatoid arthritis and inflammatory bowel disease. This drug would target that protein. The Phase 2 trial to prove the concept of the drug did not pass efficacy standards and the study was abandoned, but the drug itself is open for out-licensing.
– SYN120: This drug is a 5HT6/2A antagonist. Acorda tested it as a treatment for dementia relate to Parkinson’s disease. The outcome measures were favorable, but the desired efficacy wasn’t there. This drug is also available for out-licensing.
– rHIgM22: This drug is a remyelinating antibody that could be used to treat MS>. Early studies did not show efficacy but Acorda is considering investing more into the development of the drug, be it through partnering or out-licensing.
– GGF2: Also called cimaglermin alfa, this drug showed some promise in promoting recovery after a heart failure and enhancing function after a neurological injury, but it had side effects. GGF2 increased bilirubin and liver enzymes. Acorda is not investing any more in the development of the drug but may partner or use out-licensing.
Is Acorda Therapeutics Stock a Buy?
Acorda Therapeutics [NASDAQ: ACOR] has been focusing on reducing its costs. In 3Q19, the company revised its guidance, reducing its research and development (R&D) expenses to $55-$60 million from $70-80 million.
The company also reduced its selling, general, and administrative (SG&A) to $185-$190 million from $200-$210 million. For 2020, Acorda is looking to bring its R&D expenses down to $20-25 million and its SG&A expenses to $160-$65 million.
The key for Acorda – other than INBRIJA – is the company’s ARCUS Platform. This pulmonary drug delivery system is proprietary and targets the central nervous system.
One opportunity Acorda is pursuing is the development of a new migraine treatment. The company is also looking to expand its pipeline through in-licensing or acquisition. Per its annual report, Acorda is considering buying additional technologies or products.
Risks of Buying Acorda Therapeutics?
Revenue from Acorda’s AMPYRA has been dwindling. In 3Q18, revenue for the drug reached $137.8 million – revenue from the entire first three quarters of 2019 added up to just $122.4 million.
This is happening because the patents that protect the drug were not set to expire until 2025 at the earliest but a US District Court invalidated those patents. Acorda has not had patent exclusivity on AMPYRA since July 30, 2018.
The company tried to appeal but to no avail. Now, the company is losing market share to generic versions of the medicine.
Going forward, Acorda is focusing on boosting sales for INBRIJA and working on some partnerships that could help bring the drug to select international markets. Its efforts may be successful – or it may be a Hail Mary.
Worse yet, it is a Hail Mary with an expiration date. Acorda’s INBRIJA patents will expire between 2022 and 2032. It will have three years of regulatory exclusivity, but that is through December 21, 2021.
Further, Acorda has to convince physicians to prescribe INBRIJA and patients to ask for it as well as get insurance companies to cover it before other companies can begin making a generic version of the drug.
The rest of the drugs in the company’s pipeline are no longer being developed. They are available for out-licensing or partnership in some cases, but that doesn’t mean the company will have any takers.
INBRIJA is promising, but with sales for AMPYRA dwindling and nothing else coming up the line – and remembering it takes years to bring a drug to market – Acorda could be on a rough path. This is likely why the company is cutting its cists and halving its R&D. Acorda is effectively circling the wagons.
Acorda Therapeutics Stock Forecast Summary
Circling the wagons could mean that company is going to face some troubles, but that doesn’t mean the strategy won’t work.
INBRIJA could be crazy successful or Acorda could stumble upon a new treatment that provides enough good news to get the stock price trending in your direction.
If Acorda is able to out-license some of those products we mentioned above, that will help, but remember, there are no guarantees that the investment it receives would be sizable enough.
Just make sure you are aware of the risks before you invest.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.