Should You Be Eyeing Acorda?

Highlighted stocks include Acorda Therapeutics (ACOR), Biogen-Idec (BIIB), Pfizer (PFE), Sanofi-Aventis (SNY) and Wyeth (WYE).

Acorda Therapeutics (ACOR) released financial results for the 4th quarter 2009 on February 24, 2009. Revenues came in at $12.5 million and were comprised of $14.0 million in Zanaflex product sales, $1.5 million in discounts and product return allowances.

Management reported that Zanaflex was cash-flow positive in 2008, and will remain cash-flow positive again in 2009. Net Zanaflex sales of $12.5 million were dead-on with our forecast. Net loss of the quarter totaled $20.2 million, or $0.54 per share.

For the full year 2008, Acorda reported total revenues of approximately $47.8 million and a net loss of $74.3 million. Acorda exited the quarter with $246 million in cash and investments -- enough cash in management's view to fund operations through year-end 2010.

On January 30, 2009, Acorda Therapeutics filed the new drug application (NDA) for Fampridine-SR. The filing contains data from a comprehensive development program assessing the safety and efficacy of Fampridine-SR, including two phase III trials that involved 540 people with MS and were conducted under Special Protocol Assessments (SPAs) from the FDA.

The safety and efficacy profile of Fampridine-SR was consistent across phase II and phase III trials. In total, the NDA filing included more that 50 clinical studies and over 1,200 patient years. Additionally, more than 450 people are currently enrolled in Fampridine-SR extension trials, with treatment duration ranging from seven months to almost 5 years.

In our view, the application looks strong. The FDA should accept the filing in March and establish a PDUFA [Prescription Drug User Fee Act] action date in early December 2009. Meeting the actual date may prove to be a challenge given the backlog at the FDA, but we expect that Acorda will be in position to launch Fampridine-SR in early 2010.

Approval could be a transformational event for Acorda. The company has spent the last several years preparing for the launch with "gateway" product Zanaflex. Acorda has $500 million or more peak sales potential in the U.S. Additional upside will come from potential EU/RoW partnerships for the drug.

The positive fundamentals with the potential for approval of a $500 million product later in the year certainly makes Acorda an attractive acquisition target. Our money would be on one of the following firms: Biogen-Idec (BIIB), Pfizer (PFE) or Sanofi-Aventis (SNY).

Pfizer may be the most unlikely considering its recent attraction to Wyeth (WYE). Sanofi and Biogen both make excellent sense. Either firm could easily pay north of $30 per share. On a stand-alone basis, we see $28 as fair-value.

Read the full analyst report on ACOR

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Read the full analyst report on BIIB

Read the full analyst report on SNY