Acorda (ACOR) Q3 Earnings Top Estimates, Ampyra Sales View Up

Acorda Therapeutics, Inc. (NASDAQ:ACOR) announced third-quarter 2018 earnings per share of 17 cents, beating the Zacks Consensus Estimate of 15 cents. However, the figure declined from the year-ago bottom line of 43 cents.

Acorda generated total revenues of $142.8 million in the third quarter, comprehensively surpassing the Zacks Consensus Estimate of $85 million. Sales inched up 1.2% year over year.

Shares of Acorda were up 9.3% following its earnings release on Oct 31 pertaining to the company’s guidance raise for both cash and its multiple sclerosis (MS) drug Ampyra’s sales. However, the stock has lost 10.9% so far this year, narrower than the industry’s decrease of 19.6%.

Quarter in Detail

Majority of Acorda’s net product revenues were drawn from the company’s key drug Ampyra, which raked in sales of $137.8 million in the reported quarter. Sales of Ampyra rose 4% year over year but declined 8.3% sequentially due to completion of generic launches including Mylan's (NASDAQ:MYL) authorized generic version. However, the company is still heavily dependent on the drug for growth.

Last March, the U.S. District Court for the District of Delaware invalidated four patents pertaining to Ampyra on the basis of obviousness. Originally, these patents were set to expire between 2025 and 2027. In July, the Federal Circuit denied Acorda’s plea for a preliminary injunction to avoid at-risk launches prior to the Appeals Court decision.

In September 2018, the U.S. Court of Appeals for the Federal Circuit upheld by a 2-to-1 vote of the District Court's previous ruling to invalidate four patents of Ampyra. This paved the way for the entry of a generic product. However, the company stated that the additional six weeks of exclusivity between the end of July when its last Ampyra patent expired and the appeals court ruling in mid-September, led to better-than-expected sales in the third quarter and the increase in full-year guidance.

On third-quarter conference call, however, the company stated that Ampyra sales will see a significant decline in the coming months.

Acorda has filed an en banc petition requesting a review by the entire court regarding the unfavorable ruling for Ampyra. The idea of the application is to request for a session, which will be heard by all the judges of the court. Such reviews are often considered for extremely important cases.

Notably, in the quarter under consideration, royalty revenues plunged 36.1% to $2.8 million from the year-ago figure of $4.4 million.

Acorda’s research and development (R&D) expenses (excluding share-based compensation expenses) were $21.8 million, a decrease of 30.1% year over year.

Selling, general and administrative (SG&A) expenses (excluding share-based compensation expenses) were $39.6, reflecting a 10% year-over-year increase.

Pipeline Updates

In February 2018, the FDA accepted Acorda’s new drug application (NDA) for Inbrija. A response from the regulatory body was expected on Oct 5, 2018. However, the regulatory body extended the review timeline by three months and has now set an action date of Jan 5, 2019. The company submitted a regulatory application for Inbrija in the EU in May with a decision expected by this year-end.

The FDA postponed the timeline after Acorda submitted additional information regarding chemistry, manufacturing and controls on the regulatory agency’s request. The FDA stated that these submissions deemed a major amendment to the NDA and will require more time to reassess.

If approved, Inbrija will help address a market with large unmet medical need. Acorda estimates Inbrija’s market opportunity to be more than $800 million in the United States.

During the conference call, the company stated that Inbrija will face competition from a similar product of small pharma company Sunovion, which also has a Prescription Drug User Fee Act (PDUFA) in January 2019. Acorda believes that Inbrija will hold the majority marekt share.

During the quarter under review, Acorda stated that the FDA completed the inspections of both the Chelsea, MA-based manufacturing facility and the Inbrija inhaler device manufacturing facility. The task was successfully completed without the need for any further action by the regulatory agency.

Acorda is also consistently focused on the advancement of its phase I candidate CVT-427, an inhaled zolmitriptan, which is under evaluation for the treatment of acute migraine, using its ARCUS drug delivery technology.

2018 Guidance

The company lifted its Ampyra net sales outlook for 2018 from the range of $330-$350 million to more than $400 million.

The company retained its R&D and SG&A expenses (excluding share-based compensation) for the current year in the band of $100-$110 million and $170-$180 million, respectively.

Acorda has upped its cash balance from $300 million to above $400 million by the end of 2018.

Zacks Rank & Stocks to Consider

Acorda currently carries a Zacks Rank #3 (Hold). Two better-ranked stocks in the same sector are Gilead Sciences, Inc. (NASDAQ:GILD) and Caladrius Biosciences, Inc. (NASDAQ:CLBS) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Gilead Sciences’ earnings estimates have been revised 4.4% upward for 2018 and 4.2% for 2019 over the past 60 days.

Caladrius’ loss per share estimates has been narrowed 5.7% for 2018 and 1.6% for 2019 in the last 60 days. The stock has surged 33.1% year to date.

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