J.P. Morgan Cuts Price Target on Acorda (ACOR) Stock Following Negative Ruling on Ampyra Patent

Did an iceberg just wallop into Acorda (ACOR) stock? The drug maker’s shares are plunging at breakneck speed of almost 22% after the U.S. Court of Appeals issued a ruling finding ACOR’s Ampyra patents invalid. The company notes that there is an option for them to appeal the ruling, but they are not yet sure if they will pursue that route as they are continuing to review the ruling.

In reaction, J.P. Morgan analyst Cory Kasimov reiterates a Neutral rating on Acorda shares, while lowering the price target to $20 (from $22), which represents a potential downside of 6% from current share price. (To see Kasimov’s stock picks, click here)

Kasimov commented, “The Court of Appeals’ ruling this morning that ACOR’s remaining Ampyra patents are invalid is undoubtedly a negative, albeit not a completely unexpected outcome (particularly after a temporary injunction was denied in July). Without having complete visibility into generics manufacturers’ plans, following our conversation with the company we are expecting generics to launch near-term, and note that consensus appears to assume the same. Looking ahead, as we approach the 10/5 PDUFA date for Inbrija we expect investor focus to turn from Ampyra IP to appropriately sizing market potential for this second asset. Given the stock’s run up over the summer months (largely on expectations that the ruling could go in ACOR’s favor), the initial reaction appears reasonable and we reiterate our N rating.”

“We are removing Ampyra from our model completely (we previously assumed ~25% probability that the patents were upheld beyond mid2018). Our $20 PT assumes ~80% probability of success for Inbrija (we estimate sales of ~$800M in 2024); at 100%, PT would be $25 (if all other assumptions – pricing, penetration, etc – are held constant),” the analyst added.

Where does the rest of the Street side on this volatile biotech player? It appears mostly on the sidelines. Out of 7 analysts polled by TipRanks in the last 3 months, 2 are bullish on Acorda stock while 5 remain sidelined. With a return potential of nearly 29%, the stock’s consensus target price stands at $27.83. (See ACOR price targets and analyst ratings on TipRanks)


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