High ACOR Expectations

Tags: acor
3 Jan 1:23am
Posted by ZacksResearch
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An update has just come out recently on Acorda Therapeutics, Inc. (ACOR), in which senior pharmaceutical industry analyst Jason Napodano, CFA is being cautious and stating his Hold rating on the company. We excerpted the following details:

'The third quarter was relatively uneventful for Acorda. Sales of Zanaflex are tracking to plan and the second phase III trial on Fampridine-SR (MS-F204) continues its enrollment. We look for data from this trial in the second quarter of 2008. Acorda should be in position to file for approval later in 2008 and a launch in 2009.

'We continue to see little movement in shares of Acorda until the second quarter of 2008. We believe the market is waiting for the confirmatory results from MS-F204. The risk is what if MS-F204 disappoints, or fails to match the response rates and timed improvements seen in MS-F203. We have witnessed on many occasions a second phase III trial failed to live up to the expectations set by the first.

'We believe our financial model below is essentially in-line with consensus. Our model assumes an approval and launch of Fampridine-SR in 2009. We forecast profitability based on the ramp of Fampridine-SR in 2010. Our 2010 non-taxed EPS forecast is $1.20. By 2011 EPS should still double to approximately $2.10. We arrive at our $22 target by applying a biotech-like 25x multiple (peer-average) on this figure and discounting back to present day at 25%.

'We would not be buyers of the stock until below $16. We think that expectations are too high and there are few catalysts on the horizon before the second quarter 2008 to drive the shares much higher. We are cautious on the long-term potential on Fampridine-SR and choose to remain on the sidelines at this time.'

Read the full analyst report on ACOR.



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