Generic Challenge At the Door of Acorda (NASDAQ:ACOR)

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Raymond James analysts have updated their comment on Acorda Therapeutics Inc (NASDAQ:ACOR), and as in the past, they maintain a market perform rating on the stock. Part of the reason for the cautious optimism with Acorda is predicated on uncertainty over generic challenge for the company’s best selling multiple sclerosis drug Ampyra. However, the firm has expressed satisfaction with Acorda’s Q4 2015 results and have kept their targets for the company for 2016 unchanged nevertheless.

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Acorda is also in the process of introducing other products in the market to fuel top line growth. Q4 for Acorda was mostly positive , beating consensus and Raymond James estimates for revenue and EPS.

Earnings Summary

Acorda posted Q4 revenue of $131 million with Ampyra contributing $122 million to the revenue basket. Raymond James was looking for revenue of $129 million in the quarter and the consensus estimate called for revenue of $128 million.

Coming to the bottom line, Acorda posted adjusted EPS of $0.28, topping Raymond James’ estimate of $0.26 and consensus estimates of $0.25.

It is worth noting that despite the generic threat, the $122 million that Acorda generated from the sale of Ampyra surpassed the pre-lease target of $121 million, thus marking 11% YoY growth in the drug’s sales.

2016 outlook

Acorda remains optimistic that it will reach performance targets set for 2016. The company is looking for Ampyra revenue in the band of $475 to $485 million. R&D spending is expected to be in the range of $165 to $175 million and expenses related to sales/administration are guided between $195 and $205 million.

Acorda is also in the process of closing its Biotie acquisition later in the year.

Raymond James’ estimates unchanged

Just as Acorda kept its 2016 guidance unchanged, Raymond James’ estimates for the year have also not moved. The firm expects sales for Ampyra at $481 million and R&D spending of $190 million. As for operating expenses, Raymond James is estimating $211 million.

Issues of concern

There remain a number of issues of serious concern regarding the generic challenge to Ampyra. Acorda has settled a number of patent litigations around Ampyra, but there are more that remain unresolved, a cause of uncertainty in the stock.

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