Read original blog entry
Zacks senior pharmaceutical analyst Jason Napodano, CFA upgraded shares of Acorda Therapeutics (ACOR) today, noting, 'At today's price of $18 per share, the name looks fairly valued with our expectations and we are upgrading the name to Hold.' Napodano had previously rated shares of Acorda a Sell with a $22 target since June 2008 when he downgraded the name at roughly $33 per share. The analysts believed in June 2008 that expectations for sales of the key pipeline drug, Fampridine-SR, were too high and the valuation was stretched.
Acorda recently completed two positive phase III trials on Fampridine-SR, a drug designed to improve the walking speed and other quality of life measures in patients with all types of multiple sclerosis. A filing in the U.S. is expected in the first quarter of 2009. Napodano believes that Acorda has 'an excellent chance' at gaining approval for Fampridine-SR in 2010. His analysis pegs the drugs peak U.S. sales potential at around $500 million. Outside the U.S., Acorda is expected to partner Fampridine-SR for upfront cash and backend royalties. Napodano notes that this catalyst, expected perhaps in the next few months, could send the shares back to his $22 fair value assessment.
In fact, Napodano believes the shares become attractive and could warrant a Buy rating at prices below $16 per share. However, the analyst is maintaining his skeptical view that Fampridine-SR is a blockbuster drug (peak sales over $1B), and notes that expectations by some are still too high. However, his financial model forecast profitability based on the ramp of Fampridine-SR in 2011, and given the significant sell-off since June 2008, the Sell call is no longer warranted.
Read the full analyst report on ACOR
Get real-time market insights and profitable stock recommendations from the team of analysts at Zacks Equity Research. See all todays Analyst Blog entries on Zacks.com.