Acorda's fourth quarter GAAP net income increases to $12.7 million

Acorda Therapeutics, Inc.Feb 16 2012

Acorda Therapeutics, Inc. (Nasdaq: ACOR) today announced its financial results for the fourth quarter and full year ended December 31, 2011.

“We are also excited about our agreement with Neuronex, Inc. to acquire a pre-NDA stage therapy in neurology, diazepam nasal spray”

"We were pleased with the commercial performance of AMPYRA in 2011, as well as by the advancement of our product pipeline during the year," said Ron Cohen, M.D., Acorda Therapeutics' President and CEO. "In 2012, we will focus on disciplined, strategic investment in these areas. We believe there is ample room to continue to grow AMPYRA within its current indication, and are supporting marketing initiatives to increase both consumer awareness and use in people with earlier stages of walking disability who can benefit from the drug. We also believe that there is significant potential for AMPYRA to be applied to other indications within MS and in new disease indications. Therefore, in 2012 our R&D spend is weighted toward studies assessing additional potential uses of AMPYRA in MS, as well as in cerebral palsy and chronic stroke."

"In addition to AMPYRA, we have a robust pipeline of novel therapies that have either entered clinical development or are planned to do so in 2012. In all of our R&D efforts, we have designed studies to provide clear 'go/no go' signals that will enable us to make efficient decisions about investing in further development," added Dr. Cohen. " We are also excited about our agreement with Neuronex, Inc. to acquire a pre-NDA stage therapy in neurology, diazepam nasal spray,"

FINANCIAL RESULTS
The Company reported GAAP net income of $12.7 million for the quarter ended December 31, 2011, or $0.32 per diluted EPS, including share-based compensation charges totaling $5.5 million. For the full year 2011, the Company reported GAAP net income of $30.6 million, or $0.76 per diluted EPS, including share-based compensation charges totaling $19.3 million. The GAAP net income for the fourth quarter of 2010 was $3.7 million, or $0.09 per diluted EPS including share-based compensation charges of $5.2 million. For the full year 2010, GAAP net loss was $11.8 million, or $0.31 per diluted EPS, including share-based compensation charges of $17.8 million.

Non-GAAP net income, before share-based compensation charges, for the quarter ended December 31, 2011 was $18.2 million, or $0.45 per diluted EPS, compared to a non-GAAP net income of $8.9 million, or $0.23 per diluted EPS for the same quarter in 2010. Full year 2011 non-GAAP net income was $45.1 million, or $1.13 per diluted EPS, compared to $6.0 million or $0.16 per diluted EPS in 2010.

AMPYRA^® (dalfampridine) Extended Release Tablets, 10 mg net revenue - For the quarter ended December 31, 2011, the Company reported AMPYRA net revenue of $57.2 million, compared to $52.3 million in net revenue for the same quarter in 2010. For the full year 2011, AMPYRA net revenue was $210.5 million, compared to $133.1 million for full year 2010.

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

ZANAFLEX CAPSULES^® (tizanidine hydrochloride) and ZANAFLEX^® (tizanidine hydrochloride) tablets net revenue - For the quarter ended December 31, 2011, the Company reported combined net revenue of ZANAFLEX CAPSULES and ZANAFLEX tablets of $11.8 million, compared to combined net revenue of $12.1 million for the same quarter in 2010. The Company reported full year 2011 combined net revenue of $45.8 million, compared to combined net revenue of $48.5 million for full year 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 December 31, 2011 were $15.5 million, compared to total shipments of $15.8 million for the same quarter in 2010.

For the full year ended December 31, 2011, total ZANAFLEX CAPSULES and ZANAFLEX tablet shipments were $60.7 million, compared to total shipments of $57.3 million in 2010.

Cost of sales for the quarter ended December 31, 2011 were $13.4 million, compared to $12.9 million for the same quarter in 2010. There was an increase in AMPYRA cost of sales due to an increase in AMPYRA sales offset by a decrease in ZANAFLEX cost of sales resulting from accounting adjustments related to the Apotex patent infringement trial court decision in the third quarter of 2011. Cost of sales for the full year ended December 31, 2011 were $64.2 million, compared to $35.5 million in 2010. The increase in full year cost of sales was due to an increase in AMPYRA sales and $14.1 million in accounting adjustments in the third quarter of 2011 related to the Apotex patent infringement trial court decision.

Research and development (R&D) expenses for the quarter ended December 31, 2011 were $10.3 million, including $1.7 million of share-based compensation, compared to $8.0 million including $1.6 million of share-based compensation for the same quarter in 2010. R&D expenses for the full year ended December 31, 2011 were $42.1 million, including $5.8 million of share-based compensation, compared to $30.6 million including $5.3 million of share-based compensation in 2010. R&D expenses for the full year ended December 31, 2011 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) and initiation of an AMPYRA proof-of-concept study in cerebral palsy.

Sales, general and administrative (SG&A) expenses for the quarter ended December 31, 2011 were $35.7 million, including $3.8 million of share-based compensation, compared to $41.6 million including $3.6 million of share-based compensation for the same quarter in 2010. SG&A expenses for the full year ended December 31, 2011 were $148.5 million, including $13.5 million of share-based compensation, compared to $132.7 million including $12.5 million of share-based compensation in 2010. The increase in expenses was primarily due to increases in AMPYRA educational and regulatory activities and other expenses related to the Apotex patent infringement litigation.

For 2011, the Company was cash flow positive and closed the year in a strong financial position with cash, cash equivalents and short-term investments of $295.9 million. This represents an increase of $55.9 million over our 2010 ending cash, cash equivalent and short term investment balance.

AGREEMENT TO ACQUIRE NEURONEX, INC.

• On February 15, 2012, the Company entered into an agreement to acquire privately-held Neuronex, Inc. Under the terms of the agreement, Acorda has made an upfront payment of $2.0 million to Neuronex, and paid $500,000 of up to $1.2 million in research funding to prepare for the diazepam nasal spray pre-NDA meeting.
• Neuronex is preparing a 505(b)(2) type new drug application (NDA) for a proprietary nasal spray formulation of diazepam for certain epilepsy patients. The NDA will provide pharmacokinetic data with the nasal spray and reference older investigations on efficacy and safety for DIASTAT^® AcuDial^TM (diazepam rectal gel), a rectally-administered diazepam formulation.
• Following the pre-NDA meeting, Acorda can, at its option, complete the acquisition by paying Neuronex an additional $6.8 million. If the acquisition is completed, Acorda will assume oversight and financial responsibility for all future development and regulatory programs for diazepam nasal spray. The Company expects these expenses will not exceed $8 million in 2012.
• There are potential payments to Neuronex and other parties of $1 million for the completion and acceptance of an NDA, and up to $25 million following regulatory approvals in the United States and Europe. Acorda will also pay Neuronex milestone payments and royalties based on net sales of the medication, if approved.

GUIDANCE FOR 2012

• The following guidance does not take into account the potential expenditures related to the acquisition of Neuronex and diazepam nasal spray outlined above, other than the upfront payments that have already been made.
• The Company expects AMPYRA full year net revenue of $255-$275 million.
• The Company expects combined ZANAFLEX^® franchise and ex-U.S.FAMPYRA^® (prolonged-release fampridine tablets) royalty revenue of at least $25 million.
• SG&A expenses for the full year 2012 are expected to be $145-$160 million, excluding share-based compensation charges. SG&A will be primarily driven by commercial and administrative costs related to AMPYRA.
• R&D expenses for the full year 2012 are expected to be $50-$60 million, excluding share-based compensation. R&D expenses in 2012 related to AMPYRA include post-marketing studies, proof-of-concept studies in cerebral palsy and chronic stroke, and sponsorship of investigator-initiated studies. Additional expenses include clinical trials for GGF2, AC105 and rHIgM22, as well as ongoing preclinical studies.
• The Company expects to be cash flow positive in 2012.

AMPYRA UPDATE

• As of December 2011, approximately 70% of all people with MS who were prescribed AMPYRA received a first refill. Approximately 40% of all people with MS who were prescribed AMPYRA received a sixth refill.

• Compliance rates for AMPYRA are approximately 90%, with patients currently taking an average of 1.8 tablets per day, compared to the approved dosing of 2 tablets per day.
• 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" and issued patent application 11/010,828 "Sustained Release Aminopyridine Composition." The USPTO determined that based on preliminary patent term restoration, the former patent will extend into 2026 and that with final patent term restoration, the latter patent will extend into 2027.
• In July 2011, the European Medicines Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP) granted conditional marketing approval for FAMPYRA in Europe. FAMPYRA is being developed and marketed by Biogen Idec (Nasdaq: BIIB) outside the United States under a licensing agreement from Acorda.
• In May 2011, FAMPYRA was approved for use in Australia by the Australian Therapeutic Goods Administration (ATGA). In November 2011, Biogen Idec received approval by the New Zealand Medicines and Medical Devices Safety Authority (MEDSAFE). Biogen plans to submit regulatory filings for FAMPYRA in more than 20 countries in 2012.
• To date, Biogen Idec has launched FAMPYRA in Germany, United Kingdom, Australia, Denmark, Norway and Iceland. Launch in most of the remaining EU countries is expected by the end of 2012.

ZANAFLEX CAPSULES

• On February 6, 2012, the Company announced a partnership with Watson Pharmaceuticals, Inc. (NYSE: WPI) to introduce tizanidine hydrochloride capsules, an authorized generic version of ZANAFLEX CAPSULES. This followed the February 3, 2012 approval by FDA and subsequent launch by Apotex Inc. of its generic tizanidine capsules.

PIPELINE UPDATE

• In December 2011, the Company initiated a proof-of-concept clinical study of AMPYRA in adults with cerebral palsy.
• Preclinical data showing significant improvement in motor function following treatment with dalfampridine was presented at the International Stroke Conference on February 2, 2012. The Company plans to begin a proof-of-concept clinical study of AMPYRA in chronic stroke patients in the second half of 2012.
• Investigator-initiated studies are exploring potential additional therapeutic applications of AMPYRA. These studies are assessing AMPYRA's impact on functional deficits caused by MS or are exploring the drug's use in other neurological disorders.
• 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 is ongoing. The Company expects to announce initial study results in the second half of 2012.
• The Company plans to submit an IND for rHIgM22 in the first half of 2012. Phase 1 clinical trials are expected to begin by the end of the year.

CORPORATE UPDATES

• In January 2012, General Counsel Jane Wasman, J.D. was named Chief, Strategic Development. In this new role, Ms. Wasman will assume additional responsibilities for overseeing the development and execution of the Company's long-range strategic plans and objectives. She will continue to serve as the Company's General Counsel.
• In October 2011, Enrique J. Carrazana, M.D. joined the Company as Chief Medical Officer.
• In July 2011, the Company announced it had in-licensed AC105, a therapy being studied in acute spinal cord injury, from Medtronic Inc (NYSE: MDT). A Phase 1 study had been completed by Medtronic at the time of the agreement.