Here’s What Just Happened With Acorda Therapeutics, Inc. (NASDAQ:ACOR)

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Acorda

One of the biggest movers in the biotechnology space last week was Acorda Therapeutics, Inc. (NASDAQ:ACOR), with the company taking a real hit on some news that it was reviewing one of its ongoing studies – a trial set up to investigate the safety and efficacy of a drug called tozadenant, for the treatment for Parkinson’s disease.

The trial in question was a phase 3 study and was designed to underpin a registration application in the just mentioned target indication. Parkinson’s disease is an incredibly tough condition to treat and a pretty solid base of early to mid-stage data suggested that, with tozadenant, Acorda might be one of the first companies to get a fresh drug on shelves in the US in this population for a considerable period of time.

However, as per last week’s report, the company was having some trouble with the safety and tolerability side of the treatment. Specifically, a number of patients had reportedly died having been on the active arm of the investigation, with the official cause of death recorded as the inability to recover from an infection – specifically, sepsis.

So what does this have to do with Acorda and, in particular, it’s investigative drug asset?

Well, when we get infections, it’s the job of our immune system to help clear them up. One of the key components of this immune system is white blood cells, which (to simplify) are able to recognize and essentially absorb any infected cells.

According to the outcome of a review of the patient deaths, the reason that these patients died of sepsis is that they had a very low white blood cell count and – in turn – weren’t able to fight off the infection naturally.

Again, what does this have to do with Acorda?

Well, the drug has been known to contribute to a diminished white blood cell count in patients in this indication. The suggestion is, therefore, that it’s the drug that has indirectly caused the deaths of these patients by causing white blood cell counts to decrease and, by proxy, creating a situation in which they are unable to fight off a sepsis infection.

So why is this making headlines again this week?

Last week, all of the above was only a hypothesis based on the available information. In other words, while it was suspected that tozadenant may have something to do with the deaths indirectly, it wasn’t confirmed.

This week, however, Acorda has taken steps that have essentially confirmed the connection. Specifically, the company has announced that it is discontinuing its clinical development program for tozadenant for the treatment for Parkinson’s disease, including immediately discontinuing dosing of all participants currently enrolled in its tozadenant studies.

This is a major blow for the company and shareholders for couple of reasons.

First, because the target indication is, as outlined, a very large unmet need in the US and globally right now and if the company had been able to get its asset on shelves it could be a real revenue driver.

Second, because we have seen a considerable amount of speculative loading in the company’s share price over the past month or so in anticipation of the topline release from this study – topline that’s basically not going to come.

According to the company’s most recent communication, 90% of those patients enrolled were set to read out data at some point during the first quarter of 2018, at which point we would’ve got a real idea of whether the drug was going to be effective in this population or not. While we will likely get this readout even though the study has been discontinued, it’s now essentially meaningless. Even if the drug is shown to have worked, the safety profile means that it’s very unlikely the company will be able to pick up an approval, given the patient deaths.

It’s not impossible, of course, we have seen the FDA do more surprising things, but even if we do see the agency approve tozadenant, and based on the risk physicians are going to be asking patients to take on when they prescribe it, the potential market for the company (and, in turn, the potential revenue count for the asset) is dramatically diminished on previous analyst expectations for an unencumbered commercial push.

 

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