Acorda Therapeutics Inc (ACOR) Shares Are Getting Hammered; Here’s Why
Acorda Therapeutics Inc (NASDAQ:ACOR) stock got hammered 26% Tuesday morning as Wall Street came down hard on the company. The reason? The drug maker announced an RTF (refusal to file) letter from the FDA regarding the NDA for Inbrija (CVT-301). The FDA cited two manufacturing-related issues that prompted the RFT: 1) the date when the manufacturing site would be ready for inspection; and 2) a question regarding the submission of the drug master production record. The FDA also requested additional information at resubmission.
Acorda CEO Ron Cohen commented, “We will work with the FDA as quickly as possible to address the open issues and to clarify the path to successfully re-file our application […] We remain confident in INBRIJA’s data package and its promise as an important new therapy for people with Parkinson’s disease. We see tremendous long-term value in its solid clinical profile, significant commercial opportunity and strong IP, and we remain focused on working to bring patients this important new therapy.”
Cantor analyst William Tanner noted, “Over the nearer term, we wonder whether the FDA’s RTF for CVT-301 will more negatively impact the stock than would be calculated on a time value of money basis. Realistically, we doubt the risk of non-approval has increased much, if at all. We would not be surprised if some investors bought ACOR stock subsequent to Scopia Capital’s letter to management that stated “While we have been supportive of the Company’s strategy to this point, we believe it is now time to sell the Company” thereby creating selling pressure. We are mindful that FDA approval is crucial, of course, to the drug’s future, but the level of sales will be important, too. We believe it possible that management’s $500 million peak revenue estimate may be too high.
Overall, 4 research analysts have assigned a Hold rating and 2 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $27.67 which is 8% above where the stock closed yesterday.
Acorda Therapeutics, Inc. develops and markets therapeutic products for nervous system disorders. The company’s two main products are Ampyra and Zanaflex Capsules. The Ampyra is an oral drug, which treats to improve walking in patients with multiple sclerosis and Zanaflex Capsules, which is a short acting drug for the management of spasticity, a symptom of many central nervous system disorders, including multiple sclerosis and spinal cord injury.