Extensive Product Portfolio for This Mid-Cap Value Stock

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Acorda Therapeutics (NASDAQ: ACOR) is a mid-cap biotech stock that has created an interesting niche for itself in the neurological disorder market. The company develops walking impairment therapies in multiple sclerosis (MS) patients. It also develops and commercializes other novel therapies for neurological disorders in people with MS, spinal cord injury and other neurological conditions.

Approved Products

Ampyra (dalfampridine) is an extended release tablet indicated to improve walking in MS patients in the U.S. The same product is marketed as Fampyra by its partner Biogen Idec outside the U.S. Both products are developed under a license from Alkermes Pharma Ireland Limited.

Another marketed drug, Zanaflex is used to treat spasticity. The company also receives royalty on sales of a generic version of Zanaflex capsules from Watson Pharmaceutics.

Its third product, Qutenza (8% capsaicin patch), is indicated for the management of neuropathic pain for patients having postherpetic neuralgia (PHN).

Key Therapeutics Market

Walking Impairment:

There are several neurological disorders including MS, Huntington’s disease, Alzheimer, Parkinson, epilepsy and migraine. None of them have fundamentally disease altering cures, which creates a host of unmet needs and impairments.

Around 400,000 people in the U.S. and 2.5 million people worldwide suffer from MS, caused by damage to the protective coating of nerve cells. As the nerves surrounding the spinal cord and brain are damaged, patients often lose their ability to walk.

Historically, the MS market is dominated by large biotech and pharma companies like Biogen and Novartis. Products like Avonex, Betaseron, Rebif and Copaxone are immunomodulatory drugs which can be used against relapses in MS. In addition, protein based therapies are likely to drive the MS market with better results compared to immunomodulatory drugs. However, the symptoms still persist and demand for walking impairment will be there for MS patients despite a change in disease modifying drugs. Acorda’s Ampyra is not a disease modifying drug and is developed specifically to improve walking disability symptoms in MS patients. This product can be taken by patients receiving treatment from Avonex and Betaseron.

Neurological Pain:

The neurological pain market is predominantly driven by therapies for diabetic neuropathic pain (DNP), PHN and HIV-related neuropathic pain. More than 6 million people across the seven pharmaceutical markets are affected by these three indications; however, the population is considerably higher if we include other related pain. It is expected that the market for neuropathic pain will be around $3.6 billion by 2020. A large variety of medications including anticonvulsant, antidepressant and pain killers are available for treatment. Transdermal therapies like Acorda’a Qutenza can also be used for the management of neuropathic pain.

Stable Performance

By performance, Acorda’s total revenues increased by 15% to $87 million in 2Q, 2013. The growth is driven by 16% growth in product sales and 9% growth in royalty revenues.

Ampyra posted sales of $77.8 million, an increase of 17% compared to $66.3 million same period last year, due to rising orders from its distribution networks across the U.S. Royalties from Fampyra were $2.2 million, down by 12%, compared to $2.5 million the same period last year.

Total revenues of Zanaflex were $4.8 million. Adjusted net income has remained steady since last year. The company has strong financial position with cash and investments of $332.4 million as of June 30, 2013.

Key Milestones

Acquisition: Acorda has acquired two neuropathic pain products from NeurogesX. It includes Qutenza, an FDA approved product. Another asset is a Phase III candidate, NP-1998, intended for pain associated with neurological disorders. Acorda has paid around $8 million to NeurogesX for development and commercialization rights of Qutenza and NP-1998 in the U.S., Canada, Latin America and certain other territories. Astellas Pharma has exclusive rights for commercialization of Qutenza in 27 countries in Europe and also has the option to develop NP-1998 in some territories.

Pipeline: Acorda is also developing Diazepam Nasal Spray to treat certain epileptic seizures. Other pipeline products include AC105 for acute treatment of spinal cord injury, GGF2 for treatment of heart failure and rHIgM22, a monoclonal antibody, for the treatment of MS. RHIgM22 stimulates the myelin producing cells and remyelinates damaged nerves in MS. No drugs with such mechanism are currently available. So, on approval, this drug is expected to be a potential disease modifying agent for MS. In addition, Ampyra is going through additional studies and is currently in Phase II trial for the treatment of cerebral palsy and post-stroke deficit.


Arbaclofen Placarbil (AP) from Xenoport (NASDAQ: XNPT) is a Phase III candidate for treatment of spasticity that can compete with Acorda’s spasticity product Zanaflex. In 2Q, 2013, total revenues were $2.1 million compared to $10.4 million same quarter prior year. This is due to collaborative payment of $10 million from GSK for the approval of Horizant. The company continues to report negative earnings of $24.4 million compared to $8.0 million last year. Xenoport has limited earning potential and depends on collaborative revenues to support its business. Majority of its fund are utilized in R&D and SG&A costs. Diluted net loss per share was $0.51 compared to $0.22 in the same period last year.

Acroda’s Diazepam Nasal Spray will compete with Diastat from Valeant Pharmaceuticals (NYSE: VRX). Diastat is a rectal gel preparation of Diazepam, primarily used for the treatment of seizures in epileptic patients. During 2Q, 2013, Valeant’s total revenues were $1.1 billion, up by 41% over prior year. Product sales increased by 43% to $1.06 billion. Adjusted net income was $421 million or $1.34 per diluted share, a steep hike from last year.


Ampyra continues to drive Acorda’s performance in the U.S. and its strong relationships with Biogen will further improve sales in the international market. The same product is under trial for several indications that will boost its sales in future. In addition, the company is focusing on pipeline candidates especially for the management of neuropathic pain. The upcoming products will strengthen the company’s portfolio. Acorda has a strong financial position with positive cash flow and low dependency on external financing. Overall, Acorda is a value stock with good earning potential and solid performance in the mid-cap biotech segment.

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