Market Overview

Acorda Provides Financial and Pipeline Update for Second Quarter 2018

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  • INBRIJA™ (levodopa inhalation powder) NDA under FDA review; PDUFA date
    October 5, 2018
  • AMPYRA® (dalfampridine) 2Q 2018 net sales of $150.3 million;
    reiterating 2018 guidance of $330-$350 million
  • Awaiting AMPYRA patent decision from U.S. Court of Appeals

Acorda Therapeutics, Inc. (Nasdaq: ACOR)
provided a financial and pipeline update for the quarter ended June 30,
2018.

"Our outstanding quarter reflected the continued excellence of our
specialty neurology sales force and commercial, patient advocacy and
affiliated teams. Our primary focus now is on the approval and launch of
INBRIJA, which will benefit from these same capabilities," said Ron
Cohen, M.D., Acorda's President and CEO. "We expect INBRIJA, if
approved, to help address the large unmet medical need for the
approximately 350,000 people in the U.S. who are challenged by OFF
periods related to Parkinson's disease. Based on our continued market
research, we believe the market opportunity for INBRIJA in the U.S. is
greater than $800 million."

"The company's strong execution year to date is fueling our ability to
launch INBRIJA, to invest in the ARCUS pipeline and remain well
capitalized throughout the INBRIJA launch," Dr. Cohen continued.

Second Quarter 2018 Financial Results

AMPYRA® (dalfampridine) Extended Release Tablets, 10 mg - For
the quarter ended June 30, 2018, the Company reported AMPYRA net revenue
of $150.3 million compared to $131.6 million for the same quarter in
2017.

Research and development (R&D) expenses for the quarter ended June 30,
2018 were $25.9 million, including $1.5 million of share-based
compensation compared to $51.2 million, including $3.0 million of
share-based compensation for the same quarter in 2017.

Sales, general and administrative (SG&A) expenses for the quarter ended
June 30, 2018 were $44.3 million, including $3.7 million of share-based
compensation compared to $49.3 million, including $7.8 million of
share-based compensation for the same quarter in 2017.

Provision for income taxes for the quarter ended June 30, 2018 was $8.4
million compared to a provision for income taxes of $5.5 million for the
same quarter in 2017.

The Company reported GAAP net income of $46.2 million for the quarter
ended June 30, 2018, or $0.98 per diluted share. GAAP net loss in the
same quarter of 2017 was $8.2 million, or $0.18 per diluted share.

Non-GAAP net income for the quarter ended June 30, 2018 was $65.9
million, or $1.40 per diluted share. Non-GAAP net income in the same
quarter of 2017 was $13.3 million, or $0.29 per diluted share. This
quarterly non-GAAP net income measure, more fully described below under
"Non-GAAP Financial Measures," excludes share-based compensation
charges, non-cash interest charges on our debt, changes in the fair
value of acquired contingent consideration, and restructuring costs. A
reconciliation of the GAAP financial results to non-GAAP financial
results is included with the attached financial statements.

At June 30, 2018, the Company had cash, cash equivalents and short-term
investments of $391.7 million.

Guidance for 2018

  • The Company reiterates AMPYRA 2018 net revenue guidance of $330-$350
    million.
  • R&D expenses for the full year 2018 are expected to be $100-$110
    million and include manufacturing expenses associated with INBRIJA.
    This guidance is a non-GAAP projection that excludes share-based
    compensation, as more fully described below under "Non-GAAP Financial
    Measures."
  • SG&A expenses for the full year 2018 are expected to be $170-$180
    million. This guidance is a non-GAAP projection that excludes
    share-based compensation, as more fully described below under
    "Non-GAAP Financial Measures."
  • The Company expects to end 2018 with a year-end cash balance in excess
    of $300 million.
  • This guidance may be revised with a positive outcome of the pending
    appeal.

Second Quarter 2018 Updates

  • INBRIJA (levodopa inhalation powder)
  • The Company's Marketing Authorization Application (MAA) for INBRIJA
    was validated by the European Medicines Agency (EMA) and the
    application currently is under review. After the adoption of an
    opinion on the application by the Agency's Committee for Medicinal
    Products for Human Use (CHMP), a final decision regarding the MAA will
    be issued by the European Commission.
  • In June, the Company presented four INBRIJA abstracts at the 2nd
    Pan American Parkinson's Disease and Movement Disorders Congress in
    Miami. These data were previously presented at the American Academy of
    Neurology Annual Meeting in April 2018.
  • AMPYRA Patent Appeal
  • In June, the oral argument in the AMPYRA patent litigation took place
    at the U.S. Court of Appeals for the Federal Circuit. The Company is
    awaiting the Court's decision.
  • On July 24, the Federal Circuit denied the Company's motion for a
    preliminary injunction to prevent generic at risk launch pending the
    Court's decision.

Webcast and Conference Call

Acorda will host a conference call and webcast to review its 2Q18 update
and financial results on Thursday, August 2 at 8:30 a.m. ET. To
participate in the conference call, dial (866) 393-4306 (domestic) or
(734) 385-2616 (international) and reference the access code 4898766.
The presentation will be available on the Investors section of www.acorda.com.

A replay of the call will be available from 11:30 a.m. ET on August 2,
2018 until 11:59 p.m. ET on September 1, 2018. To access the replay,
dial (855) 859-2056 (domestic) or (404) 537-3406 (international);
reference code 4898766. The archived webcast will be available in the
Investor Relations section of the Acorda website at www.acorda.com.

Non-GAAP Financial Measures

This press release includes financial results prepared in accordance
with accounting principles generally accepted in the United States
(GAAP), and also certain historical and forward-looking non-GAAP
financial measures. In particular, Acorda has provided non-GAAP net
income, adjusted to exclude the items below, and has provided 2018
guidance for R&D and SG&A expenses on a non-GAAP basis. Non-GAAP
financial measures are not an alternative for financial measures
prepared in accordance with GAAP. However, the Company believes the
presentation of non-GAAP net income, when viewed in conjunction with our
GAAP results, provides investors with a more meaningful understanding of
our ongoing and projected operating performance because this measure
excludes (i) non-cash compensation charges and benefits that are
substantially dependent on changes in the market price of our common
stock, (ii) non-cash interest charges related to the accounting for our
outstanding convertible debt which are in excess of the actual interest
expense owing on such convertible debt as well as non-cash interest
charges related to the Fampyra royalty monetization, the asset based
loan which was terminated in 2017 and acquired Biotie debt, (iii)
changes in the fair value of acquired contingent consideration which do
not correlate to our actual cash payment obligations in the relevant
periods, (iv) acquisition related expenses and related foreign currency
gains that pertain to a non-recurring event, and (v) expenses that
pertain to non-routine restructuring events. The Company believes its
non-GAAP net income measure helps indicate underlying trends in the
Company's business and is important in comparing current results with
prior period results and understanding projected operating performance.
Also, management uses this non-GAAP financial measure to establish
budgets and operational goals, and to manage the Company's business and
to evaluate its performance.

In addition to non-GAAP net income, we have provided 2018 guidance for
R&D and SG&A expenses on a non-GAAP basis. Due to the forward looking
nature of this information, the amount of compensation charges and
benefits needed to reconcile these measures to the most directly
comparable GAAP financial measures is dependent on future changes in the
market price of our common stock and is not available at this time. The
Company believes that these non-GAAP measures, when viewed in
conjunction with our GAAP results, provide investors with a more
meaningful understanding of our ongoing and projected R&D and SG&A
expenses. Also, management uses these non-GAAP financial measures to
establish budgets and operational goals, and to manage the Company's
business and to evaluate its performance.

About Acorda Therapeutics

Founded in 1995, Acorda Therapeutics is a biopharmaceutical company
focused on developing therapies that restore function and improve the
lives of people with neurological disorders. Acorda has a pipeline of
novel neurological therapies addressing a range of disorders, including
Parkinson's disease and multiple sclerosis. Acorda markets two
FDA-approved therapies, including AMPYRA® (dalfampridine) Extended
Release Tablets, 10 mg.

Forward-Looking Statement

This press release includes forward-looking statements. All statements,
other than statements of historical facts, regarding management's
expectations, beliefs, goals, plans or prospects should be considered
forward-looking. These statements are subject to risks and uncertainties
that could cause actual results to differ materially, including: the
ability to realize the benefits anticipated from acquisitions, among
other reasons because acquired development programs are generally
subject to all the risks inherent in the drug development process and
our knowledge of the risks specifically relevant to acquired programs
generally improves over time; we may need to raise additional funds to
finance our operations and may not be able to do so on acceptable terms;
our ability to successfully market and sell Ampyra (dalfampridine)
Extended Release Tablets, 10 mg in the U.S., which will likely be
materially adversely affected by the March 2017 court decision in our
litigation against filers of Abbreviated New Drug Applications to market
generic versions of Ampyra in the U.S.; the risk of unfavorable results
from future studies of Inbrija (levodopa inhalation powder) or from our
other research and development programs, or any other acquired or
in-licensed programs; we may not be able to complete development of,
obtain regulatory approval for, or successfully market Inbrija, or any
other products under development; risks associated with complex,
regulated manufacturing processes for pharmaceuticals, which could
affect whether we have sufficient commercial supply of Inbrija to meet
market demand, if it receives regulatory approval; third party payers
(including governmental agencies) may not reimburse for the use of
Ampyra, Inbrija or our other products at acceptable rates or at all and
may impose restrictive prior authorization requirements that limit or
block prescriptions; the occurrence of adverse safety events with our
products; the outcome (by judgment or settlement) and costs of legal,
administrative or regulatory proceedings, investigations or inspections,
including, without limitation, collective, representative or class
action litigation; competition; failure to protect our intellectual
property, to defend against the intellectual property claims of others
or to obtain third party intellectual property licenses needed for the
commercialization of our products; and failure to comply with regulatory
requirements could result in adverse action by regulatory agencies.

These and other risks are described in greater detail in our filings
with the Securities and Exchange Commission. We may not actually achieve
the goals or plans described in our forward-looking statements, and
investors should not place undue reliance on these statements.
Forward-looking statements made in this press release are made only as
of the date hereof, and we disclaim any intent or obligation to update
any forward-looking statements as a result of developments occurring
after the date of this press release.

###

Financial Statements

Acorda Therapeutics, Inc.
Condensed Consolidated Balance
Sheet Data

(in thousands)
(unaudited)

           

June 30,
2018

December 31,
2017

 
Assets
Cash, cash equivalents and short-term investments $ 391,716 $ 307,068
Trade receivable, net 64,360 81,403
Other current assets 17,329 15,726
Finished goods inventory 21,147 37,501
Property and equipment, net 42,524 36,669
Goodwill 284,100 286,611
Intangible assets, net 428,762 430,603
Other assets   678   2,388
Total assets $ 1,250,616 $ 1,197,969
 
Liabilities and stockholders' equity
Accounts payable, accrued expenses and other current liabilities $ 113,161 $ 127,495
Current portion of deferred license revenue 9,057
Current portion of royalty liability 7,081 6,763
Current portion of loans payable 629 645
Convertible senior notes 313,679 308,805
Contingent consideration 109,174 112,722
Non-current portion of deferred license revenue 23,398
Non-current portion of royalty liability 26,102 29,025
Non-current portion of loans payable 24,698 25,670
Deferred tax liability 37,586 22,459
Other long-term liabilities 11,871 11,943
Total stockholder's equity   606,635   519,987
Total liabilities and stockholders' equity $ 1,250,616 $ 1,197,969
 

Acorda Therapeutics, Inc.
Consolidated Statements of
Operations

(in thousands, except per share amounts)
(unaudited)

         

Three Months Ended
June 30,

Six Months Ended
June 30,

 
2018   2017 2018   2017
 
Revenues:
Net product revenues $ 150,412 $ 132,756 $ 253,415 $ 245,349
Royalty revenues 2,890 4,418 6,052 8,946
License revenue     2,264     4,529
Total revenues 153,302 139,438 259,467 258,824
 
Costs and expenses:
Cost of sales 31,094 29,665 52,444 54,848
Cost of license revenue 159 317
Research and development 25,910 51,184 56,470 97,677
Selling, general and administrative 44,263 49,334 91,864 101,039
Acquisition related expenses 320

Change in fair value of acquired
contingent consideration

 

  (7,000 )   6,400   (800 )   17,200
Total operating expenses 94,267 136,742 199,978 271,401
               
Operating income (loss) $ 59,035 $ 2,696 $ 59,489 $ (12,577 )
 
Other (expense) income, net   (4,482 )   (5,421 )   (9,658 )   (9,970 )
Income (loss) before income taxes 54,553 (2,725 ) 49,831 (22,547 )
Provision for income taxes   (8,356 )   (5,471 )   (11,833 )   (4,552 )
Net income (loss) $ 46,197 $ (8,196 ) $ 37,998 $ (27,099 )
 
Net income (loss) per common share - basic $ 0.99 $ (0.18 ) $ 0.82 $ (0.59 )
Net income (loss) per common share - diluted $ 0.98 $ (0.18 ) $ 0.81 $ (0.59 )
Weighted average common shares - basic 46,799 45,943 46,546 45,876
Weighted average common shares - diluted 47,201 45,943 46,974 45,876
 

Acorda Therapeutics, Inc.
Non-GAAP Income and Income per
Common Share Reconciliation

(in thousands, except per share
amounts)

(unaudited)

         

Three Months Ended
June 30,

Six Months Ended
June 30,

 
2018   2017 2018   2017
 
GAAP net income (loss) $ 46,197 $ (8,196 ) $ 37,998 $ (27,099 )
Pro forma adjustments:
Non-cash interest expense (1) 3,970 3,785 7,973 6,365
 
Change in fair value of acquired

contingent consideration (2)

(7,000 ) 6,400 (800 ) 17,200
 
Restructuring costs (3) 278 7,590 1,316 7,590
 
Acquisition related expenses (4) 320
 
Unrealized foreign currency gain (5) (247 )
 
Share-based compensation expenses

included in R&D

1,519 2,972 3,225 5,507
Share-based compensation expenses

included in SG&A

  3,725   7,772   7,887   13,108
Total share-based compensation expenses 5,244 10,744 11,112 18,615
               
Total pro forma adjustments 2,492 28,519 19,601 49,843
 
Income tax effect of reconciling items

above (6)

(17,233 ) 7,013 (16,156 ) 16,836
               
Non-GAAP net income $ 65,922 $ 13,310 $ 73,755 $ 5,908
 
Net income per common share - basic $ 1.41 $ 0.29 $ 1.58 $ 0.13
Net income per common share - diluted $ 1.40 $ 0.29 $ 1.57 $ 0.13
Weighted average common shares - basic 46,799 45,943 46,546 45,876
Weighted average common shares - diluted 47,201 45,982 46,974 45,986
 
 

(1) Non-cash interest expense related to convertible senior notes,
asset based loan (which was terminated in
Q2 2017), Biotie
non-convertible and R&D loans and Fampyra royalty monetization.

(2) Changes in fair value of acquired contingent consideration
related to the Civitas transaction.
(3) Restructuring costs associated with corporate restructuring
initiatives.
(4) Transaction expenses related to the Biotie acquisition.
(5) Unrealized foreign currency transaction gain related to the
Biotie acquisition.
(6) Represents the tax effect of the non-GAAP adjustments.
 

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