Shares of Acorda Therapeutics, Inc. ACOR have declined sharply in the year so far. The stock has plunged 89.7% versus the industry’s increase of 5.4%.
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Acorda’s lead multiple sclerosis (MS) drug Ampyra is facing generic competition in the United States after it lost exclusivity in September 2018 including Mylan's MYL authorized generic version. During the first nine months of 2019, sales of Ampyra have tanked 68.7% year over year due to generic launches.
Sales erosion due to generic competition has been pulling Ampyra’s revenues down for some time now, causing the stock to display a downtrend persistently. Management believes that Ampyra sales will continue to suffer a steep fall in the future quarters as well.
Acorda is heavily dependent on Ampyra to draw major part of its revenues and losing out on the same in the upcoming quarters will be a big blow to the company’s top line.
Meanwhile, Acorda’s Parkinson disease (PD) drug Inbrija, launched in February this year, generated sales of $9.2 million during the first nine months of 2019. The company believes that Inbrija sales will pick up in the future, having received an encouraging feedback from doctors as well as patients since its introduction.
Moreover, in September 2019, Inbrija inhalation powder was approved in Europe. This should boost the drug’s sales ahead.
We would like to remind investors that in October 2019, Acorda implemented a corporate restructuring whereby it reduced the workforce by almost 25%. The company expects to realize estimated annualized cost savings of approximately $21 million beginning in the second quarter of 2020 owing to headcount cut. This is a positive for the company and it remains to be seen whether this can actually drive the stock in the future.
Importantly, the successful commercialization of Inbrija is imperative to Acorda’s long-term growth, especially as generic competition looms large on Ampyra. Although Inbrija is pretty new to the market, the drug’s successful commercialization along with its sales uptick should help the stock recover in 2020.
Acorda Therapeutics, Inc. Price
Zacks Rank & Stocks to Consider
Acorda currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the biotech sector include Anika Therapeutics Inc. ANIK and Vertex Pharmaceuticals Incorporated VRTX, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Anika’s earnings estimates have moved 16% north for 2019 and 17.4% for 2020 over the past 60 days. The stock has soared 72% so far this year.
Vertex’s earnings estimates have been revised 5% upward for 2019 and 10.6% for 2020 over the past 60 days. The stock has surged 33.8% year to date.
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