Ampyra Supports Acorda Yet Again - Analyst Blog

Acorda Therapeutics Inc.'s (ACOR) shares gained 11.5% on the back of better-than-expected fourth quarter 2010 preliminary results, which were recently provided by the company.

We note that Acorda derives its revenue from two marketed products – Ampyra and Zanaflex.

Ampyra Impresses Again

The company recorded sales of $55.7 million for fourth quarter 2010 from its lead product Ampyra (dalfampridine). For full year 2010, Ampyra sales were $141.4 million. The drug, which is yet to receive approval outside the US, is available in the US as a treatment for improving walking in multiple sclerosis (MS) patients.

Acorda had reported third quarter gross Ampyra sales of $52.6 million. On the third quarter conference call, the company had said that Ampyra sales were impacted by a huge backlog of prescription requests received earlier in 2010, which could not be filled until the third quarter.

With the backlog being taken care of, Acorda was expecting lower sales for the fourth quarter. However, the shares of the company shot up with Ampyra experiencing a 6% sequential growth in the fourth quarter.

Acorda has a licensing agreement with Biogen Idec Inc. (BIIB) for the development and commercialization of Ampyra outside the US. Biogen is currently seeking regulatory approval for Ampyra in Canada and the European Union (EU), with a response expected in the first half of 2011. Acorda has a supply agreement with Elan Corporation plc (ELN) for manufacturing Ampyra.

Other Details

Revenues from the shipment of Zanaflex Capsules and tablets amounted to $15.8 million in the fourth quarter of 2010 and $57.3 million in full year 2010. Gross sales of Zanaflex, marketed for the treatment of spasticity, are recognized using a deferred revenue recognition model.

Additionally, Acorda expects cash, cash equivalents and short-term investments to exceed $235 million for 2010.

Neutral on Acorda

We currently have a long-term Neutral recommendation on Acorda, which is supported by a Zacks #3 Rank (short-term Hold rating). We expect investors to remain focused on the sales ramp-up of Ampyra and its approval in the EU.

Meanwhile, Acorda is looking to expand its portfolio by in-licensing a development or commercialization stage neurology product.

 
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