Acorda: After FDA Approval, What's Next for Ampyra?

Includes: ACOR, BIIB, ELN
by: EP Vantage

Acorda Therapeutics’ (NASDAQ:ACOR) clinical and regulatory rollercoaster ride has come to an end with FDA approval last week of its MS drug Ampyra (dalfampridine; previously fampridine-SR). Now the company and its partners, Elan (NYSE:ELN) and Biogen Idec (NASDAQ:BIIB), must hope that the drug lives up to lofty expectations.

For a medium-cap company with just one product franchise on the market generating $51 million in sales last year, Acorda will be a very transformed company by 2014 if Ampyra meets EvaluatePharma’s consensus estimates of $521 million in sales that year. But the question remains whether payers, physicians and patients will embrace a drug that has shown to improve walking speed, which, whilst an important marker of quality of life, is not a direct therapeutic approach to MS.

Acorda will be going it alone for the March launch in the US, where the company is adding around 50 representatives to beef up its sales force to around 100 (Acorda on verge of landmarkapproval, January 12, 2010). The drug is expected to be available through a network of specialty pharmacies, and, given its expected price of up to $10,000 a year, the company will have a patient support center that will work with insurers to ensure coverage or find patient assistance programs.

There is no doubt about the value of the drug for Acorda, and its decision to market in the US without a partner. With an NPV of $1.3 billion Ampyra outweighs Acorda’s current market capitalisation of nearly $1.1 billion, according to EvaluatePharma's NPV Analyzer. Demonstrating the value of the decision to Acorda, the stock market responded to FDA’s decision on Friday by sending the sharres to $28.12, up 9% from opening. In early trade today, the share price edged a further 1%, to $28.41.

Delivery technology

Elan, which established a joint venture with Acorda in 1998 to develop treatments for MS, is due 7% of upfront and milestone payments that Acorda receives from Biogen Idec, the rest-of-world marketing partner for the product. Biogen Idec paid $110 million upfront, with regulatory and sales milestones of up to $400 million and tiered, double-digit royalties for rights to the drug. UBS analysts estimate Elan will be entitled to 16% royalties on global sales, yielding $83.4 million for the Irish company in 2014.

Analysts are estimating a price of $5,000-$10,000 a year for the drug, leaning toward the upper end because of unmet need and demand. Analysts said physicians have estimated that 50% of patients will be offered Ampyra and up to 40% will get a good response and stay on the drug. There are an estimated 400,000 MS patients in the US and 2.5 million worldwide.

But a successful launch could transform Acorda for years to come. Chief executive Ron Cohen told the recent J.P. Morgan Healthcare Conference that the company was looking to acquire phase II and III neurology assets. Right now it only has a follow-on product to Ampyra in phase III, called Ampydin IR for Guillian-Barre syndrome, and six pre-clinical candidates. If Ampyra lives up to its hype, it can fund the company’s rapid expansion into multiple drug lines.