Unfavorable Ruling Forces Acorda to Pink Slip 20% of Jobs
April 5, 2017
By Mark Terry, BioSpace.com Breaking News Staff
Ardsley, NY-based Acorda Therapeutics announced significant restructuring, including laying off approximately 20 percent of its 597 employees.
This comes only a few weeks after the U.S. District Court for the District of Delaware overturned four of the company’s key patents for its lead drug Ampyra for multiple sclerosis (MS). That will leave the company with a single patent coverage for the drug, although it plans to appeal the decision. The company expects to lose exclusivity to the drug after July 2018.
Ten companies want to market generic versions of Ampyra, including Mylan and Roxane Laboratories. They filed to do so with the U.S. Food and Drug Administration (FDA). Acorda responded with a lawsuit, according to Reuters, “seeking a court declaration that its patent on the drugs were valid.”
Seven of the generic companies, including Allergan and Par Pharmaceuticals, settled with Acorda. Mylan, Roxane and Teva Pharmaceutical Industries (TEVA) refused to settle, and challenged the patents’ validity in court.
Last year, Acorda brought in $520 million in revenue, with Ampyra providing $493 million of it.
Ron Cohen, chief executive officer of Acorda, told Endpoints News’ John Carroll “The fact that a single judge can completely up-end everyone’s expectations is a profound risk. It reemphasizes just how risky this business is.”
The job cuts will be completed this month. Acorda expects the cost savings will be $21 million per year, with short-term severance charges and expenses running about $8 million.
As of the end of last year, Acorda had $159 million in cash and cash equivalents, and expects 2017 to be cash flow positive. It has $345 million in convertible senior notes due in 2021 with a conversion price of $42.56. The company states, “Acorda believes that the cost savings from the restructuring and subsequent operating expense reductions will enable it to fund operations through the key milestones for its late-stage development programs, including the commercial launch of CVT-301, pending approval from the U.S. Food and Drug Administration (FDA), and Phase III data for tozadenant. The Company plans to file a New Drug Application (NDA) for CVT-301 with the FDA in the second quarter of 2017.”
Tozadenant is in development for Parkinson’s disease.
This signifies a shift away from the company’s early-stage clinical work toward its late-stage programs. The majority of the job cuts will be on its research-and-development staff as a result. As part of its planning, the company is looking to partner or license out a number of its early-stage programs. These include rHIgM22 for multiple sclerosis that’s currently in a second Phase I trial; BTT1023, a fully human monoclonal antibody against vascular adhesion protein-1 (VAP-1); and oncology indications for tozadenant.
Cohen indicates that the company would prefer to keep SYN0120, which is a dual-mechanism compound that may have applications in psychosis, cognition, and Parkinson’s disease.
Acorda and Ampyra face other tough news as well. On March 28, the FDA approved Genentech ’s Ocrevus (Ocrelizumab) for relapsing and primary progressive forms of multiple sclerosis. It’s the first and only drug approved for both relapsing and primary progressive forms of MS. Because Ocrevus is less expensive than some other MS medications, it is expected to put pricing pressure on MS drugs in general. And there is also expected to be a generic version of Novartis ’s Gilenya for MS launched in 2019.