Acorda Therapeutics Inc.‘s (ACOR) fourth quarter earnings of 9 cents per share were lower than the Zacks Consensus Estimate of 17 cents but way above the year-ago loss of 59 cents per share. Fiscal year 2010 loss per share of 31 cents also missed the Zacks Consensus Estimate of a loss of 24 cents per share. Fiscal year 2009 loss per share was higher at $2.22.
The substantial recovery in fourth quarter earnings was driven by higher revenues.
Quarterly revenues saw a whopping 362.6% increase to $66.8 million, beating the Zacks Consensus Estimate of $64 million. Revenues for fiscal year 2010 of $191.0 million, which reflected a year-over-year upside of 249.4%, also beat the Zacks Consensus Estimate of $188 million, with Ampyra sales exceeding expectations.
Quarterly Details
Fourth quarter revenues comprised $64.4 million (up 433.1%) in product sales and $2.4 million (flat year-over-year) in license fees. Gross sales of Ampyra, which was launched in March 2010, came in at $52.3 million. The product is off to a strong start with about 7,000 physicians having written at least one prescription for the drug as of December 31, 2010.
Ampyra, aimed at improving walking speed in multiple sclerosis patients, has been developed by Acorda. The company has a licensing agreement with Biogen Idec (BIIB) for the development and commercialization of the drug outside the US. Further, Acorda has a supply agreement with Elan Corporation (ELN) for manufacturing Ampyra.
Earlier, in January, Biogen faced a setback with the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) recommending against the approval of Fampyra (ex-US name of Ampyra). Biogen plans to file a request for re-examination of the decision taken by the CHMP.
Zanaflex capsules and tablets recorded gross sales of $12.1 million in the fourth quarter, same as year-ago sales. Revenues from Zanaflex capsules have been declining lately due to increasing managed care pressure on patients to opt for low-cost generic tizanidine tablets over higher-cost Zanaflex capsules.
While research and development (R&D) expenses declined 32.6% to $6.4 million; selling, general and administrative (SG&A) expenses increased 85.4% to $38.2 million. The substantial increase in the SG&A spend was due to costs incurred on the launch of Ampyra. We believe SG&A expenses will continue to increase as Acorda focuses on the successful commercialization of Ampyra.
Expenses pertaining to R&D moderated during the quarter due to a delay in the initiation of a phase I trial of glial growth factor 2 (GGF2), being evaluated for the treatment of heart failure patients.
Guidance for 2011
Along with the fourth quarter and fiscal year 2010 results, Acorda provided sales and operating expenses projection for 2011. The company forecasts revenues of $205 million to $230 million from Ampyra alone in 2011. It expects Zanaflex sales to continue declining in 2011.
Acorda expects SG&A expenses for the year in a range of $130 million to $140 million, driven primarily by commercial and administrative costs related to the launch of Ampyra.
Further, Acorda estimates R&D expenses for 2011 to range from $40 million to $45 million. The expenses will include costs related to post-marketing studies of Ampyra and other development expenses.
Our Take
We currently have a Neutral recommendation on Acorda, which is supported by a Zacks #3 Rank (short-term Hold rating). The successful US commercialization of Ampyra helped the company achieve profitability during the fourth quarter and narrowed the fiscal year loss.
We expect investors to remain focused on the sales ramp-up of the product and its approval in the European Union (EU).
Meanwhile, Acorda is looking to expand its portfolio by in-licensing a development or commercialization stage neurology product. If successful, we believe the company would be able to generate additional revenues.
ACORDA THERAPT (ACOR): Free Stock Analysis Report
BIOGEN IDEC INC (BIIB): Free Stock Analysis Report
ELAN CP PLC ADR (ELN): Free Stock Analysis Report
Zacks Investment Research
