Evercore Comments on Acorda Therapeutics Inc (ACOR) as it Ends Development of Epilepsy Drug

Shares of Acorda Therapeutics Inc (NASDAQ:ACOR) are down nearly 5% in early trading Friday, after the drug maker announced that it will discontinue the development of Plumiaz nasal spray, as data from ongoing clinical trials do not demonstrate its bioequivalence to Diastat rectal gel.

Evercore ISI analyst Mark Schoenebaum was the first to commented, “We spoke to the company, who was unable to provide much color in terms of how this will affect its P&L, but assured that updated guidance will be provided on the next quarterly earnings call.”

The analyst continued, “Consensus models peak revenues of $75MM in 2022, representing 7% of consensus total company revenues. As a reference, recall that the company guided to $200MM peak revenues and spent $10MM on Plumiaz in 2015. If we remove these revenues from the consensus model, assume a 60% operating margin for the product (better than consensus margins for the company, as Plumiaz was a 505b2 small molecule with relatively low costs), this decreases 2020 EPS by $0.61 (or ~10%) from consensus of $6.09. We modeled $120MM in peak, risk-adjusted sales of Plumiaz in 2022. Removing Plumiaz revenue, downward adjusting R&D and SG&A spend by 3%, and removing associated milestone payments of $12.5MM in 2017 lowers our model’s DCF by $4.50, from $33 to $28.50.”

Schoenebaum rates Acorda Therapeutics shares a Hold with a price target of $32, which implies an upside of 24.5% from current levels.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Mark Schoenebaum has a yearly average return of 13% and a 75% success rate. Schoenebaum is ranked #735 out of 3929 analysts.

Out of the 9 analysts polled by TipRanks, 5 rate Acorda Therapeutics stock a Buy, 3 rate the stock a Hold and 1 recommends Sell. With a return potential of 67.7%, the stock’s consensus target price stands at $43.13.