Acorda Therapeutics Inc. (ACOR) posted a loss of 2 cents per share for the first quarter of fiscal 2011, compared with a loss of 56 cents in the year-ago period. The Zacks Consensus Earnings Estimate for the quarter was 18 cents per share.

Despite increased revenues, higher operating expenses resulted in a loss during the quarter.

Quarterly Details

Quarterly revenues saw a whopping 245.3% increase to reach $61.3 million, with Ampyra sales exceeding expectations. However, revenues missed the Zacks Consensus Estimate of $65 million.

Fourth quarter revenues comprised $58.9 million (up 282.9%) in product sales and $2.4 million (flat year over year) in license and royalty revenue. Sales of Ampyra, which was launched in March 2010, came in at $46.8 million.

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.

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 sales of $12.2 million in the first quarter, same as the year-ago figure. 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 the higher-cost Zanaflex capsules.

Acorda’s research and development (R&D) expenses climbed 32.1% to $10.7 million. The expenses mainly consisted of costs related to post-marketing studies and life cycle management programs of Ampyra and expenditure associated with the phase I trial of glial growth factor 2 (GGF2). GGF2 is being evaluated for the treatment of heart failure patients.

Selling, general and administrative (SG&A) expenses came in at $38.1 million, 42.7% higher than the year-ago figure. The substantial increase in the SG&A spend was due to costs incurred on the launch of Ampyra and those related to Zanaflex Capsules patent infringement lawsuit. The trial date for the lawsuit has been postponed to May 9 from April 25.

Guidance for 2011 Reaffirmed

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 marketing 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 Zacks #3 Rank (short-term Hold rating) on Acorda. We expect investors to remain focused on the sales ramp-up of Fampyra and its approval in the European Union (EU).

Meanwhile, Acorda is looking to expand its portfolio by in-licensing products. If successful, we believe the company would be able to generate additional revenues.

 
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