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Acorda Therapeutics shares sink after FDA delays review of its Parkinson's disease drug therapy

Oppenheimer analysts are sticking to their Perform rating and US$21 price target
An elderly man
Inbrija aims to reduce the symptoms of OFF periods, which are characterized by the re-emergence of Parkinson's symptoms

Shares of Acorda Therapeutics Inc (NASDAQ:ACOR) sank Thursday after the biotech acknowledged that the US Food and Drug Administration has extended its review period for its drug for Parkinson’s disease.

The lengthening of the review by the FDA for its drug Inbrija came after Acorda submitted additional information about the orally-inhaled levodopa therapy for the treatment of symptoms of Parkinson’s disease. “The FDA determined that these submissions constitute a major amendment and will take additional time to review,” according to an Acorda statement.

US regulators have pushed the review date to January 5 of next year from October 5.

In response, investors sent Acorda shares down 15.4% in Thursday’s pre-market session to US$15.65.

Inbrija aims to reduce OFF periods for people with Parkinson’s, which are characterized by the re-emergence of the disease's motor and non-motor symptoms.

Parkinson’s is a neurodegenerative disorder, which affects about 1mln people in the US and 1.2mln in Europe.

Read: Acorda Therapeutics shares jump on media reports of takeover interest from Biogen and others

This is not the first disappointment Acorda has endured this week. Its shares are also down on Monday’s news that a US Appeals court has affirmed a prior ruling that four patents for its multiple sclerosis drug Ampyra are invalid.

In March of last year, a federal judge discredited four patents protecting Ampyra on the grounds they were too obvious. Dealing a blow to the biotech, a three-judge panel on the US Court of Appeals voted 2 to 1 to affirm the previous ruling on the patents.

Despite the negative headlines, Oppenheimer analysts Jay Olson and Silvan Tuerkcan are sticking to their Perform rating on Acorda with a US$21 price target on the view that the “fairly-valued” company is transforming itself into a pre-commercial biotech focused on Parkinson’s disease.

The analysts do, however, have reservations about the potential regulatory and commercial risks Inbrija faces, citing the FDA’s delay in reviewing Inbrija.

“The Inbrija US filing was not accepted by the FDA and needs to be resubmitted,” Olson and Tuerkcan wrote in a note to investors. “Additional risks come from the potential challenges of building a Parkinson’s disease-focused sales organization, which is a slightly different target for Acorda, and/or lower than expected peak sales due to higher than anticipated competition or by failure to gain the support of the medical community, healthcare prescribers, and third-party payers.”

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