Seeking Alpha
StockMatusow, stockmatusow (538 clicks)
Long/short equity, deep value, value, research analyst
Profile| Send Message| ()  

Acorda Therapeutics, Inc., (ACOR) a commercial stage biopharmaceutical company, involves in the identification, development, and commercialization of therapies for multiple sclerosis (MS), spinal cord injury, and other nervous system disorders. Its marketed products include Ampyra (dalfampridine), a potassium channel blocker for improving walking in patients with MS; and Zanaflex Capsules and Zanaflex tablets (tizanidine hydrochloride), a short-acting drug for the management of spasticity.

The company's pipeline also includes various products in development for the treatment, regeneration, and repair of the spinal cord and brain. Its early-stage programs include 3 biologic therapeutic approaches for restoring neurologic and cardiac function, which comprise Neuregulin Program for developing GGF2, a molecule in the Phase I clinical trial for the treatment of heart failure; Remyelinating Antibodies Program for developing rHIgM22, an antibody in the preclinical stage for treating MS; and Chondroitinase Program, a research stage program focused on developing chontroitinase as a therapeutic to break down inhibitory factors in the scar tissue that develops as a result of an injury to the CNS. The company also holds license for the development and commercialization of AC105, a proprietary magnesium formulation as an acute treatment SCI and traumatic brain injury.

Acorda Therapeutics sells its products through specialty sales force, managed markets team, and contract pharmaceutical telesales organizations primarily in the United States. The company was founded in 1995 and is based in Hawthorne, New York.

Products currently on the market:

AMPYRA; Indicated as a treatment to improve walking in patients with MS. (Multiple Sclerosis)

More than 400,000 people in the U.S. and nearly 2.5 million people worldwide are living with MS. For many people living with MS, the disease affects their ability to walk. In a 2008 Harris Interactive survey of people living with MS co-sponsored by Acorda and the National MS Society, almost two thirds reported having walking impairment, and of that group 70% indentified walking impairment to be the most challenging aspect of their MS.

ANAFLEX CAPSULES; Is a short-acting drug for the management of spasticity in relation to spinal cord injuries.

Spasticity is a frequent and often significant consequence of injuries to the central nervous system, including multiple sclerosis , spinal cord injury (SCI), brain trauma and stroke. People with spasticity can suffer severe, painful muscle spasms and/or rigidity during the day and night. ZANAFLEX CAPSULES are thought to reduce spasticity by blocking nerve impulses through pre-synaptic inhibition of motor neurons, which decreases spasticity without reducing muscle strength.

Drugs in Phase Clinical pipeline:

AC105; (Phase 2 clinical) Accute treatment of spinal cord injuries.

AC105 is a proprietary magnesium formulation licensed by Acorda in 2011. In preclinical studies, AC105 has demonstrated neuroprotective properties leading to improvement of locomotor function in SCI and cognitive function in TBI when therapy was initiated within four hours of injury. AC105 has completed Phase 1 trials in healthy volunteers and Acorda expects to initiate a Phase 2 clinical trial program in SCI, potentially expanding into other central nervous system indications, such as TBI and stroke. The U.S. Food and Drug Administration (FDA) granted Fast Track designation on February 12, 2009 for AC105 to improve functional recovery following treatment of acute SCI patients. Acorda expects to apply for FDA Orphan drug designation for the acute treatment of SCI and will explore Orphan drug designations in Europe and in other parts of the world given its worldwide development and commercialization rights.

GGF2; (Phase 1 clinical) Neuregulin Growth Factor Stimulating Repair in Nervous and Cardiac Systems.

GGF2 acts directly on heart muscle cells, or cardiomyocytes. It is believed to improve the heart's ability to contract by restoring cardiomyocyte functions that are impaired in disease including cell signaling and metabolism. Preclinical studies demonstrate that GGF2 may also protect the heart structure from acute and chronic stressors.

GGF2 in Neurological Disorders;

In published studies, neuregulins demonstrated a range of effects in neuroprotection and repair of nerve tissues, which have led to promising results in a range of preclinical models of disease and injury to both the central and peripheral nervous systems.

In published preclinical studies, GGF2 has been shown to partially protect the brain from the consequences of stroke and restore motor function with an extremely wide treatment time window of several days. Preclinical data has also shown improvements in function following damage to peripheral nerves. In a preclinical model that simulates nerve damage that occurs with surgical prostatectomy, GGF2 was shown to protect nerves and restore erectile function.

Pipelined drugs in pre clinical:

rHIgM22; Preclinical studies have demonstrated rHIgM22 can stimulate remyelination by stimulating oligodendrocytes (the myelin producing cells) and increasing repair of areas of demyelination. This process helps to restore electrical conduction and may also serve to protect the exposed nerve fiber from further damage.

Completed GMP (Good Manufacturing Practice) manufacturing and toxicology studies are ongoing. If results are acceptable, the Company expects to file an Investigational New Drug (IND) application for the treatment of MS. Under a license agreement entered into with Mayo Clinic in September 2000, Acorda was granted exclusive worldwide rights to develop rHIgM22 and related antibodies as a treatment for nervous system disorders.

Chondroitinase; (currently in R&D)

Chondroitinase may have implications in conditions where nervous system plasticity and recovery from spinal cord injury is limited.

Acorda has a very impressive line of marketed, Phase clinical, pre clinical, and R&D drug pipeline. Their main focus is to target patients with Spinal cord injuries and MS. (Multiple Sclerosis)

I cannot stress enough the market potential for these

treatments. Acorda certainly looks like a great long term investment at first glance. Acorda is certainly engaged in some very beneficial drugs to ease the suffering of many.

The chart on Acorda is interesting:


(Click to enlarge)

Notice the trend line from April 2011 to July 2011. We can clearly see the correlation between the sharp downturn in the overall equity markets from the summer of 2011. If we connect the trend line right before the run-up in April to The Middle of October trend line, we can see the longer term uptrend channel is still in tact.

As of 1/13/11, Acorda was trading at $26.61.

Stock Price History
Beta: 0.54
52-Week Change: -4.28%
S&P500 52-Week Change: -0.46%
52-Week High (May 31, 2011): 33.48
52-Week Low (Oct 4, 2011): 18.36
50-Day Moving Average: 23.58
200-Day Moving Average: 24.45

Based on the latest chart, I expect Acorda to test near the 200 MA before moving up towards a new 52 week high.

Share Statistics
Avg Vol (3 month): 470,646
Avg Vol (10 day): 784,662
Shares Outstanding: 39.67M
Float: 34.00M
% Held by Insiders: 2.06%
% Held by Institutions: 101.20%
Shares Short (as of Dec 30, 2011): 4.04M
Short Ratio (as of Dec 30, 2011): 11.70
Short % of Float (as of Dec 30, 2011): 11.90%
Shares Short (prior month): 4.20M

The Avg. 3 month volume is 470,646 shares a day, rather decent liquidity for a quick in and out trade if you want to play a swing.

Institutions appear to own over 100 percent? Interesting if that number is correct because it tells me that hedge funds have Acorda fully in play.

Needless to say, it certainly appears Acorda shares are being tightly held.

Financial Highlights
Fiscal Year
Fiscal Year Ends: Dec 31
Most Recent Quarter (mrq): Sep 30, 2011
Profitability
Profit Margin (TTM): 7.54%
Operating Margin : 14.03%
Management Effectiveness
Return on Assets : 7.36%
Return on Equity : 13.11%
Income Statement
Revenue : 286.39M
Revenue Per Share : 7.37
Qtrly Revenue Growth (yoy): 46.20%
Gross Profit : 155.49M
EBITDA 6: 44.52M
Net Income Avl to Common : 21.58M
Diluted EPS : 0.54
Qtrly Earnings Growth (yoy): 51.70%
Balance Sheet
Total Cash (mrq): 268.81M
Total Cash Per Share (mrq): 6.78
Total Debt (mrq): 6.33M
Total Debt/Equity (mrq): 3.39
Current Ratio (mrq): 4.49
Book Value Per Share (mrq): 4.78
Cash Flow Statement
Operating Cash Flow : 34.95M
Levered Free Cash Flow : 16.75M

Acorda has pretty solid fundamentals. I expect the above numbers to only get better moving forward with their impressive drug pipeline.

As I have stated my opinion before in my prior articles, Bio-Pharma will be the best sub sector in 2012.

I strongly recommend Acorda for both a shorter term swing trade and a longer term buy and hold. I am considering taking a position in Acorda for my Father's investment portfolio. I Consider a good entry point between the current levels and $25 a share.

My price target for 2012 is $40 a share.

My 3 year price target is $80+ a share.

In my opinion, Acorda may just be the best Mid Cap long term buy and hold for 2012.

My best long term growth small cap is Antares Pharma (AIS). You can refer to my author profile here to read my articles that cover Antares Pharma and why it is my best small cap pick of 2012. I encourage everyone to do the due diligence on Antares.

Also on my watch list for this week are; Dendreon (DNDN), Human Genome Sciences (HGSI), Arena Pharmaceuticals (ARNA), Vivus Inc. (VVUS), Idenix Pharmaceuticals (IDIX), ARIAD Pharma (ARIA), and Inhibitex Inc (INHX).

Source: Acorda Therapeutics: A Mid Cap Bio-Pharma Poised For Big Long-Term Returns