Acorda Therapeutics Inc (ACOR) Faces Clear Setback With Unfavorable Ampyra Ruling


On Friday, Acorda Therapeutics Inc (NASDAQ:ACOR) was met with misfortune after a district judge invalidated four patents for its multiple sclerosis drug Ampyra, initially sending shares on an almost 7% dip. Though J.P. Morgan analyst Cory Kasimov has been confident on Acorda, following what he deems a “Positive String of Events [Coming] to a Disappointing End,” he has now shifted to the sidelines.

On back of this “clear setback,” the analyst downgrades from an Overweight to a Neutral rating on shares of ACOR while cutting the price target from $32 to $24, which represents a 19% increase from where the stock is currently trading.

Though ACOR management has eyes on appealing the judge’s ruling, it is worthy to note that the appeal process could draw out over the next year to year and half. Moreover, the biotech firm is in the works of conjuring a game plan B to implement a contingency strategy, details of which the analyst believes will be revealed with the firm’s next quarterly update.

Ultimately, “While the recent IPR ruling was favorable […] Friday’s decision obviously was not. The net result after a busy 1Q is that valuation is roughly back to where we started. Our call played out. At this juncture, we are moving to the sidelines and downgrading to Neutral (from Overweight). While we still see longer-term value in ACOR (based mainly on the potential of ‘301 as well as the optionality of other pipeline assets), we view the balance of 2017 as primarily an execution year (NDA filing and regulatory progress with ‘301). A number of events are on the 2018 horizon – including the approval and launch of CVT-301 and Phase 3 toz data (not to mention the outcome of the Ampyra IP appeal) – but in the meantime we expect shares to trade in line with the sector and believe there are other opportunities in our universe that are relatively more attractive,” Kasimov concludes.

Moving ahead, on back of a successful phase 3 for CVT-301, designed to treat the OFF periods in Parkinson’s disease, the firm will be gearing up for a prospective launch. Lastly, the firm will also turn to investigating more closely assets like its acute migraine drug CVT-427 in primary sclerosing cholangitis, as well as Parkinson’s disease dementia drug SYN-120.

As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, Cory Kasimov is ranked #4,410 out of #4,562 analysts. Kasimov has a 38% success rate and loses 5.8% in his annual returns. When recommending ACOR, Kasimov forfeits 5.1% in average profits on the stock.

TipRanks analytics exhibit ACOR as a Buy. Based on 10 analysts polled by TipRanks in the last 3 months, 4 are bullish on Acorda stock while 6 remain sidelined. With a return potential of 57%, the stock’s consensus target price stands at $33.00.

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