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Here's Why Acorda Therapeutics Inc Is In Real Trouble Right Now


If there is one company in the biotechnology space that could be in some real long-term trouble it's Acorda Therapeutics Inc (NASDAQ: ACOR). Acorda recently announced that it has decided to discontinue a phase 3 trial of one of its lead development assets (more on this in a moment) and, with the discontinuation, comes what will likely amount to a close to $400 million reduction in estimated annual sales across the next five years.

This comes on the back of a spate of other development setbacks, each of which have the potential to bring about a similar impact on long-term revenue potential.

Further, all of this comes against a backdrop of the company's lead portfolio asset's (i.e. the drug from which it generates the vast majority of its revenues) march towards patent expiry and, in turn, the onslaught of generic competition that this sort of expiry brings.

So, what's happened, what does it all mean and is there any light at the end of the tunnel?

First, let's address the trial discontinuation.

The study in question was set up to investigate an asset called tozadenant, which Acorda was developing as part of its Parkinson's disease program. The company picked up the asset on the back of its buyout of Biotie during early 2016, a buyout that cost Acorda a little over $360 million. At the time of the acquisition, there was plenty of evidence in place to suggest that tozadenant could be a strong addition to the existing (and extremely limited) portfolio of Parkinson's drugs available to sufferers of this disease in the US.

For anybody new to the asset, it's part of a family of drugs called adenosine A2a receptor antagonists and it's designed to potentially reduce the severity and the length of what are called OFF periods in patients with Parkinson's disease. These are the periods in time for which the standard of care treatment in the sector, levodopa, doesn't have any real effect on the symptoms of the disease.

Anyway, as mentioned, there was plenty of early to mid-stage data in place that suggested tozadenant could be effective to this target stated aim and that's what drove Acorda to acquire the asset last year.

This week, however, and as mentioned above, the company has discontinued the trial that spearheaded its tozadenant program based on a number of patient deaths in the phase 3 investigation. While the specifics remain somewhat unclear, it looks as though a number of patients had developed an infection of the blood (sepsis) and had concurrently been suffering from what's called agranulocytosis. This latter term refers to the deficiency of white blood cells, which are the cells responsible for the fighting of infections. These patients have then died because the low white blood cell count meant they couldn’t fight off the infection.

The logical conclusion is that tozadenant is what has caused the agranulocytosis and that, in turn, the drug has been indirectly responsible for the deaths of the patients in question.

So, it's no surprise that Acorda has decided to drop the asset but, as mentioned above, this isn't a ring-fenced setback for the company.

The FDA issued a complete response letter (CRL) for a secondary development asset, called CVT-301, earlier this year. Combined, Acorda was expecting to generate just shy of $1 billion in annual revenues from CVT-301 and tozadenant, with the former accounting for $500 million and the latter accounting for $400 million of these $1 billion dollars in revenues.

There are serious doubts as to whether CVT-301 will make it to market and, even if it does, it could take another couple of years before it picks up an FDA approval. Combine this with the fact that tozadenant will probably be dropped altogether and, even with an approval in a couple of years, Acorda is looking at an extended period of time during which it's going to have to rely solely on its currently approved asset – a drug called Ampyra – which, as mentioned, is quickly approaching patent expiry.

US courts ruled against some patent enforcement suits brought by the company and rooted in the drug and earlier this year and the ruling translated to Acorda axing nearly 20% of its workforce.

With generic activity expected mid to late 2018, the company's ability to generate revenues on this asset beyond next year is very much in doubt. For 2017, the company put guidance on the asset of around $550 million.

So, going back to the initial question, is there any light at the end of the tunnel?

Right now, the answer is no.

Acorda is going to have to hope that it can get CVT-301 back on track and in front of the FDA ahead of a successful outcome very soon or it's looking at a dramatically reduced annual revenue count and very little in the way of follow-up assets in its pipeline that could help it claw back some of the revenue-based setback.

Disclosure: the author has no positions in any of the stocks mentioned in this piece

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: contributor contributorsBiotech News FDA General


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