Acorda Therapeutics, Inc. ( ACOR Quick Quote ACOR - Free Report) announced that it has entered into a definitive agreement with New Jersey based Catalent, Inc. ( CTLT Quick Quote CTLT - Free Report) for selling its Inbrija (levodopa inhalation powder) manufacturing operations in Chelsea, MA for $80 million upfront payment in cash. With this deal, Acorda is looking to save around $10 million in annual operating expenses which will help the company to reduce its debt in the long run.
Per the deal, Acorda employees at the Chelsea facility, along with some employees who work at the Waltham, MA facility, will now join Catalent. As a result of the above deal, the companies entered into a long-term supply agreement, wherein Catalent will manufacture, package and ensure uninterrupted global supply of Inbrija for Acorda’s patients.
The transaction is expected to close in the first quarter of 2021, subject to customary closing conditions.
Meanwhile, Acorda also announced a corporate restructuring plan to cut its workforce by approximately 16%, which is likely to save annual costs by around $6 million beginning this year. The plan will affect the employees at Ardsley, NY; Waltham and Acorda’s field workforce.
We note that Inbrija was approved by the FDA in December 2018 as inhaled levodopa for treating OFF periods in patients suffering from Parkinson’s and receiving a carbidopa / levodopa regimen. In the first nine months of 2020, the medicine generated sales worth $14.9 million, reflecting an increase of 62.6% year over year.
Shares of Acorda were up 44.3% following the announcement of the above news on Wednesday. However, the stock has declined 52.1% in the past year against the
industry’s increase of 8.4%. Along with the same press release, Acorda announced preliminary sales numbers for 2020 and also issued expense guidance for 2021.
The company expects preliminary net revenues for Inbrija to be around $9 million in the fourth quarter of 2020. Preliminary net revenues for Ampyra (dalfampridine), approved for the improvement of walking in multiple sclerosis patients, are anticipated to be approximately $25 million in the fourth quarter of 2020.
For full-year 2020, preliminary net revenues for Inbrija and Ampyra are expected to be approximately $24 million and $98 million, respectively. Adjusted operating expenses are anticipated in the range of $170-$180 million for 2020, unchanged from the previous guidance.
Acorda expects to reduce operating expenses by approximately $40 million annually, resulting from the sale of the Chelsea manufacturing unit, restructuring procedure and other cost reductions.
The company anticipates operating expenses in the band of $130-$140 million for full-year 2021.
Zacks Rank & Stocks to Consider
Acorda currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the biotech sector include
Blueprint Medicines Corporation ( BPMC Quick Quote BPMC - Free Report) and Halozyme Therapeutics, Inc. ( HALO Quick Quote HALO - Free Report) , both carrying a Zacks Rank #1 (Strong Buy) at present. You can see . the complete list of today’s Zacks #1 Rank stocks here
Blueprint Medicines’ loss per share estimates have narrowed 1.6% for 2021 over the past 60 days. The stock has rallied 29.5% in the past year.
Halozyme’s earnings estimates have been revised 2.4% upward for 2021 over the past 60 days. The stock has skyrocketed 123.1% in the past year.
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