Acorda third quarter GAAP net income increases to $18.9 million

Acorda Therapeutics, Inc.Nov 4 2011

Acorda Therapeutics, Inc. (Nasdaq: ACOR) today announced its financial results for the third quarter ended September 30, 2011.

“We are pleased with the renewed growth of AMPYRA over the last two quarters. Persistence and compliance rates among patients who respond to AMPYRA are high. This will be an important contributor to the long-term growth of the brand”

"We are pleased with the renewed growth of AMPYRA over the last two quarters. Persistence and compliance rates among patients who respond to AMPYRA are high. This will be an important contributor to the long-term growth of the brand," said Ron Cohen, M.D., Acorda Therapeutics' President and CEO.

"In addition, independent market research indicates that our marketing campaigns, which highlight the benefits of AMPYRA in people with early-stage walking impairment, are resonating with prescribers. Surveys also indicate that physicians believe the majority of their current patients who are appropriate for AMPYRA have not yet tried the drug. We are also focusing our programs on reaching the large pool of MS patients with walking impairment who are not yet aware of the potential benefits of AMPYRA."

FINANCIAL RESULTS

The Company reported GAAP net income of $18.9 million for the quarter ended September 30, 2011, or $0.47 per diluted EPS, including share-based compensation charges totaling $5.1 million, net milestone revenue of $23.3 million relating to Biogen Idec's receipt of conditional approval from the European Commission for FAMPYRA and accounting adjustments totaling $15.5 million relating to ZANAFLEX CAPSULES due to the Apotex patent infringement trial decision described in the ZANAFLEX CAPSULES section below. The GAAP net income for the third quarter of 2010 was $12.4 million, or $0.31 per diluted EPS including share-based compensation charges of $4.8 million.

Non-GAAP net income, before share-based compensation charges, net milestone revenue and accounting adjustments relating to ZANAFLEX CAPSULES due to the Apotex patent infringement trial court decision for the quarter ended September 30, 2011 was $16.2 million or $0.40 per diluted EPS, compared to a non-GAAP net income of $17.2 million, or $0.43 per diluted EPS for the same quarter in 2010.

AMPYRA^® (dalfampridine) Extended Release Tablets, 10 mg net revenue - For the quarter ended September 30, 2011, the Company reported AMPYRA net revenue of $54.7 million, compared to $49.8 million in net revenue for the same quarter in 2010.

AMPYRA revenue is recognized following shipment of the product from the Company's distribution facility to its network of specialty pharmacies.

The Company reiterates its 2011 net sales guidance for AMPYRA of $205 - $230 million.

ZANAFLEX CAPSULES^® (tizanidine hydrochloride) and ZANAFLEX^® (tizanidine hydrochloride) tablets net revenue - For the quarter ended September 30, 2011, the Company reported combined net revenue of ZANAFLEX CAPSULES and ZANAFLEX tablets of $10.7 million, compared to combined net revenue of $11.5 million for the same quarter in 2010.

ZANAFLEX revenue is recognized using a deferred revenue recognition model, meaning ZANAFLEX CAPSULES and ZANAFLEX tablets shipments to wholesalers are recorded as deferred revenue and only recognized as revenue when end-user prescriptions of ZANAFLEX CAPSULES and ZANAFLEX tablets are reported.

ZANAFLEX CAPSULES and ZANAFLEX tablets shipments - Total ZANAFLEX CAPSULES and ZANAFLEX tablets shipments for the quarter ended September 30, 2011 were $14.1 million, compared to total shipments of $14.6 million for the same quarter in 2010.

Cost of sales for the quarter ended September 30, 2011 were $26.7 million compared to $11.7 million for the same quarter in 2010. The increase in cost of sales was due to the increase in AMPYRA sales and $14.1 million in accounting adjustments related to the Apotex patent infringement trial court decision.

Research and development expenses for the quarter ended September 30, 2011 were $9.1 million, including $1.5 million of share-based compensation, compared to $8.0 million including $1.5 million of share-based compensation for the same quarter in 2010. Research and development expenses for the quarter included costs related to AMPYRA post-marketing studies and life cycle management programs, and the development of the Company's pipeline products, including Phase 1 clinical trial expenses for Glial Growth Factor 2 (GGF2).

The Company is refining its full year 2011 research and development expense guidance to $35-$40 million excluding share-based compensation charges, from $40-45 million excluding share-based compensation charges.

Sales, general and administrative expenses for the quarter ended September 30, 2011 were $34.7 million, including $3.5 million of share-based compensation and accounting adjustments of $1.1 million to the Paul Royalty Fund (PRF) put/call liability and $336,000 for a sample inventory reserve relating to ZANAFLEX CAPSULES due to the Apotex patent infringement trial court decision described in the ZANAFLEX CAPSULES section below, compared to $30.6 million including $3.3 million of share-based compensation for the same quarter in 2010. The increase in expenses was also due to increases in AMPYRA educational and regulatory activities and other expenses related to the Apotex patent infringement litigation.

The Company reaffirms its full year 2011 sales, general and administrative expense guidance of $130-$140 million excluding share-based compensation charges.

In the third quarter of 2011, the Company was cash flow positive and closed the quarter in a strong financial position with cash, cash equivalents and short-term investments of $268.8 million.

AMPYRA UPDATE

• As of September 2011, approximately 70% of all people with MS who were prescribed AMPYRA received a first refill. Approximately 40% of people with MS who were prescribed AMPYRA received a sixth refill.
• As of September 2011, the average duration of therapy on AMPYRA was approximately 10 months, up from 5 months in January 2011. The average duration of therapy is expected to increase over time.
• Compliance rates for AMPYRA are high at 90%, with patients currently taking an average of 1.8 tablets per day, compared to the approved dosing of 2 tablets per day.
• On August 10, the United States Patent and Trademark Office (USPTO) allowed U.S. Patent Application No. 11/102,559 entitled "Method of Using Sustained Release Aminopyridine Compositions."
• The USPTO issued the previously allowed patent application 11/010,828 "Sustained Release Aminopyridine Composition." The USPTO determined that with the final patent term restoration, this patent will extend into May 2027.
• In September, Biogen Idec launched FAMPYRA^® (prolonged-release fampridine tablets) in Germany. Availability in other European countries is expected to follow. FAMPYRA is being developed and marketed by Biogen Idec outside the United States under a licensing agreement from Acorda.
• During the third quarter, Acorda recorded a $25 million milestone payment from Biogen Idec based on EU approval of FAMPYRA. Based on its worldwide license and supply agreement with Elan, Elan received 7% of this milestone payment from Acorda.
• In October, analyses of AMPYRA open-label clinical trial extension studies and one year post-marketing safety data were presented at the 5^th Joint Triennial Congress of European and Americas Committees for Treatment and Research in Multiple Sclerosis (ECTRIMS and ACTRIMS). The safety profile of AMPYRA in both analyses was consistent with that seen in placebo-controlled clinical trials. Analysis of walking speed data from the extension studies showed that people who responded to AMPYRA had sustained improvement compared to non-responders for up to five years on treatment.

ZANAFLEX CAPSULES

• On September 7, Acorda announced that the U.S. District Court for the District of New Jersey ruled against it in its patent litigation against Apotex Corporation and Apotex, Inc. The Court held that the claims of U.S. Patent No. 6,455,557 covering use of multiparticulate tizanidine compositions are invalid and not infringed by Apotex Corporation and Apotex, Inc. The Company is appealing the decision.
• Certain accounting adjustments were made during the third quarter relating to ZANAFLEX CAPSULES as a result of the Apotex patent infringement trial court decision. This included a $13.0 million intangible asset impairment included in cost of sales, a $1.0 million commercial inventory reserve included in cost of sales, a $1.1 million PRF put/call liability adjustment included in SG&A, and a $336,000 sample inventory reserve included in SG&A.

PIPELINE UPDATE

• The Company plans to begin a proof-of-concept clinical study of AMPYRA in adults with cerebral palsy by the end of 2011.
• Based on positive preclinical data, the Company plans to begin a proof-of-concept clinical study of AMPYRA in post-stroke patients in 2012.
• The Company expects to begin enrolling participants in a Phase 2 clinical trial of AC105 in patients with acute spinal cord injury in the second half of 2012.
• The Phase 1, escalating dose clinical trial of GGF2 in heart failure patients, being conducted in collaboration with the Vanderbilt University Heart and Vascular Institute, is ongoing. The Company expects to present initial study results at a meeting in the first half of 2012.
• The Company plans to submit an IND for rHIgM22 in the first half of 2012.

CORPORATE UPDATES

• Enrique J. Carrazana, M.D. joined the Company as Chief Medical Officer.
• Acorda and the National Multiple Sclerosis Society sponsored a Harris Interactive poll of people with MS. The survey found walking difficulties or trouble with balance affect 65% of people with multiple sclerosis, and 70% of people with MS-related walking difficulties report that trouble walking is the most challenging aspect of MS. Yet, 40% of people with MS "rarely or never" discuss walking problems with their doctor. The survey results were presented at the 2011 ECTRIMS/ACTRIMS conference.