Acorda Therapeutics, Inc. (Nasdaq: ACOR) today provided a financial and pipeline update for the second quarter ended June 30, 2016.

"AMPYRA's continued growth is fueling investment in our late stage pipeline. We expect several important milestones in the second half of 2016 and early 2017, including data from our Phase 3 dalfampridine post-stroke and CVT-301 trials. These near-term opportunities target large, unmet needs and have the potential to improve the lives of people with these serious neurological diseases," said Ron Cohen, M.D., Acorda's President and CEO. "We are working towards concluding our acquisition of Biotie later this year and excited about the addition of the tozadenant Phase 3 program to our pipeline of late stage assets."

Financial Results

The Company reported a GAAP net loss attributable to Acorda of $18.3 million for the quarter ended June 30, 2016, or $0.40 per diluted share. GAAP net income in the same quarter of 2015 was $1.0 million, or $0.02 per diluted share.

Non-GAAP net income for the quarter ended June 30, 2016, was $3.4 million, or $0.07 per diluted share. Non-GAAP net income in the same quarter of 2015 was $13.5 million, or $0.31 per diluted share. Non-GAAP net income excludes share based compensation charges, non-cash interest expense, acquisition-related expenses, expenses associated with changes in the fair value of acquired contingent consideration, foreign currency losses/(gains) and tax adjustments. A reconciliation of the GAAP financial results to non-GAAP financial results is included in the attached financial statements.

AMPYRA ® (dalfampridine) Extended Release Tablets, 10 mg - For the quarter ended June 30, 2016, the Company reported AMPYRA net revenue of $122.1 million compared to $105.5 million for the same quarter in 2015.

ZANAFLEX CAPSULES ® (tizanidine hydrochloride), ZANAFLEX ® (tizanidine hydrochloride) tablets and authorized generic capsules - For the quarter ended June 30, 2016, the Company reported combined net revenue and royalties from ZANAFLEX and tizanidine of $(0.7) million compared to $3.2 million for the same quarter in 2015. Combined net revenue and royalties for the period ended June 30, 2016, includes a charge of $3.0 million due to an increase in current and estimated future returns for ZANAFLEX.

FAMPYRA ® (prolonged-release fampridine tablets) - For the quarter ended June 30, 2016, the Company reported FAMPYRA royalties from sales outside of the U.S. of $2.7 million compared to $2.5 million for the same quarter in 2015.

Research and development (R&D) expenses for the quarter ended June 30, 2016, were $50.3 million, including $2.6 million of share-based compensation, compared to $31.2 million, including $2.2 million of share-based compensation for the same quarter in 2015. R&D expenses increased due to investment in our late stage programs, as well as the addition of Biotie R&D expenses from the date of acquisition.

Sales, general and administrative (SG&A) expenses for the quarter ended June 30, 2016, were $53.1 million, including $6.7 million of share-based compensation, compared to $52.8 million, including $6.5 million of share-based compensation for the same quarter in 2015. SG&A expenses exclude transaction expenses related to the Biotie acquisition and include Biotie expenses for the quarter ended June 30, 2016, from the date of acquisition.

Benefit from income taxes for the quarter ended June 30, 2016, was $1.0 million, including $2.4 million of cash taxes, compared to a provision for income taxes of $1.1 million, including $0.6 million of cash taxes, for the same quarter in 2015.

At June 30, 2016, the Company had cash, cash equivalents and investments of $137.4 million. The decrease in cash from December 31, 2015, is primarily attributable to the Company's acquisition of Biotie. In June 2016, the Company entered into a three-year senior secured revolving credit agreement with JP Morgan Chase Bank, N.A. for up to $60 million.

2016 Financial Guidance
  • The Company reiterates AMPYRA 2016 net sales guidance of $475-$485 million.
  • R&D guidance is revised from $165-$175 million to $195-$205 million. This guidance is a non-GAAP projection which excludes share-based compensation, as more fully described below under "Non-GAAP Financial Measures." The increase in R&D expense is primarily driven by the addition of tozadenant, a Phase 3 asset for the treatment of OFF periods for people with Parkinson's disease.
  • SG&A guidance remains unchanged at $195-$205 million. This guidance is a non-GAAP projection which excludes share-based compensation for the Company and transaction expenses related to the Biotie acquisition, as more fully described below under "Non-GAAP Financial Measures." SG&A guidance reflects the addition of the Biotie operations, offset by reductions in current and projected SG&A expenses.
  • The Company expects to be approximately cash flow neutral for the second half of 2016.

Second Quarter 2016 Highlights

Commercial
  • AMPYRA ® (dalfampridine)
    • AMPYRA revenues for the second quarter of 2016 were $122.1 million, up 16% from the second quarter in 2015. This represents the 13 th consecutive quarter of double-digit, year-over-year growth for AMPYRA, which was launched in 2010.
    • In June, the United States Court of Appeals for the Federal Circuit denied a request by Mylan Pharmaceuticals for a rehearing of the Court's previous decision to uphold a lower court ruling that Acorda's Abbreviated New Drug Application (ANDA) litigation against Mylan can continue in the District Court of Delaware. Mylan has indicated that it intends to file a petition for certiorari to the United States Supreme Court.
    • In July, the Company submitted its responses to four Inter Partes Review (IPR) petitions to the United States Patent and Trademark Office (USPTO). A decision on the IPR is expected in March 2017.
    • A District Court trial for Company's litigation against six generic companies seeking ANDA approvals is scheduled for September 2016. The Company has five Orange Book-listed patents on AMPYRA and will vigorously defend its intellectual property rights.

Late Stage Clinical Pipeline
  • Dalfampridine in Post-Stroke Walking Difficulties (PSWD)
    • Data from an unblinded analysis of the current twice-daily (BID) clinical trial are expected in the fourth quarter of 2016. Data from the Phase 1 multi-dose pharmacokinetic (PK) testing for once-daily (QD) dalfampridine are also expected in the fourth quarter of 2016.
    • If the multi-dose PK and BID analyses are positive, the Company plans to move forward with two concurrent, pivotal Phase 3 trials of dalfampridine in PSWD in mid-2017 using a QD formulation.
  • CVT-301 in Parkinson's Disease
    • In June, data from the CVT-301 Phase 2b clinical trial were presented in three posters during the 20th International Congress of Parkinson's Disease and Movement Disorders in Berlin, Germany.
    • Last patient out (LPO) of the ongoing Phase 3 efficacy study is expected by the end of 2016.

Early Stage Pipeline
  • CVT-427 in Migraine
    • Data from a Phase 1 pharmacokinetic (PK) study of CVT-427, an inhaled formulation of zolmitriptan, showed increased bioavailability and faster absorption compared to oral and nasal administration of the same active ingredient. The trial enrolled 21 healthy adults.
    • The data showed that median TMAX was about 12 minutes for all CVT-427 doses compared to 1.5 hours for the oral tablet and 3.0 hours for the nasal spray.
    • There were no serious adverse events, dose limiting toxicities, or study discontinuations due to adverse events reported after administration. The most commonly reported treatment-emergent AEs were cough, chest discomfort, headache and feeling hot. Apart from cough, single dose CVT-427 tolerability was generally consistent with the known safety profile of zolmitriptan.
    • The data were presented at the 58th Annual Scientific Meeting of the American Headache Society in San Diego, CA.
    • The Company plans to initiate a special population study in the second half of 2016, and expects to advance this program into Phase 2 in 2017.
  • Other Pipeline
    • In May, development of PLUMIAZ TM, an investigational therapy for the treatment of seizure clusters in people with epilepsy, was discontinued after data from the Phase 3 clinical trials did not demonstrate its bioequivalence to Diastat ® (diazepam) rectal gel.

Corporate Updates
  • The Company has received more than 97% of Biotie's outstanding shares in the tender offer and expects to complete the purchase of 100% of Biotie's shares in the second half of this year.
  • In June, Biotie delisted its American Depositary Shares from the NASDAQ following the filing of an application on Form 25 with the U.S. Securities and Exchange Commission.
  • In July, Dr. Burkhard Blank assumed the role of Chief Medical Officer (CMO). Dr. Blank was named interim CMO in January 2016, and previously served as CMO for several biopharmaceutical companies, including Boehringer Ingelheim, Inc.

Webcast and Conference Call

The Company will host a conference call today at 8:30 a.m. ET to review its second quarter 2016 results.

To participate in the conference call, please dial (855) 542-4209 (domestic) or (412) 455-6054 (international) and reference the access code 40809722. The presentation will be available on the Investors section of www.acorda.com. Please log in approximately 5 minutes before the scheduled time of the presentation to ensure a timely connection.

A replay of the call will be available from 11:30 a.m. ET on July 28, 2016, until 11:59 p.m. ET on August 4, 2016. To access the replay, please dial (855) 859-2056 (domestic) or (404) 537-3406 (international) and reference the access code 40809722. The archived webcast will be available in the Investor Relations section of the Acorda website.

About Acorda Therapeutics

Founded in 1995, Acorda Therapeutics is a biotechnology company focused on developing therapies that restore function and improve the lives of people with neurological disorders.

Acorda has an pipeline of novel neurological therapies addressing a range of disorders, including Parkinson's disease, post-stroke walking difficulties, migraine, and multiple sclerosis. Acorda markets three FDA-approved therapies, including AMPYRA ® (dalfampridine) Extended Release Tablets, 10 mg.

For more information, please visit the Company's website at: www.acorda.com.

Forward-Looking Statement

This press release includes forward-looking statements. All statements, other than statements of historical facts, regarding management's expectations, beliefs, goals, plans or prospects should be considered forward-looking. These statements are subject to risks and uncertainties that could cause actual results to differ materially, including: the ability to complete the Biotie transaction on a timely basis; the ability to realize the benefits anticipated from the Biotie and Civitas transactions, among other reasons because acquired development programs are generally subject to all the risks inherent in the drug development process and our knowledge of the risks specifically relevant to acquired programs generally improves over time; the ability to successfully integrate Biotie's operations and Civitas' operations, respectively, into our operations; we may need to raise additional funds to finance our expanded operations and may not be able to do so on acceptable terms; our ability to successfully market and sell Ampyra (dalfampridine) Extended Release Tablets, 10 mg in the U.S.; third party payers (including governmental agencies) may not reimburse for the use of Ampyra or our other products at acceptable rates or at all and may impose restrictive prior authorization requirements that limit or block prescriptions; the risk of unfavorable results from future studies of Ampyra or from our other research and development programs, including CVT-301 or any other acquired or in-licensed programs; we may not be able to complete development of, obtain regulatory approval for, or successfully market CVT-301, any other products under development, or the products that we will acquire when we complete the Biotie transaction; the occurrence of adverse safety events with our products; delays in obtaining or failure to obtain and maintain regulatory approval of or to successfully market Fampyra outside of the U.S. and our dependence on our collaborator Biogen in connection therewith; competition; failure to protect our intellectual property, to defend against the intellectual property claims of others or to obtain third party intellectual property licenses needed for the commercialization of our products; and failure to comply with regulatory requirements could result in adverse action by regulatory agencies.

These and other risks are described in greater detail in our filings with the Securities and Exchange Commission. We may not actually achieve the goals or plans described in our forward-looking statements, and investors should not place undue reliance on these statements. Forward-looking statements made in this presentation are made only as of the date hereof, and we disclaim any intent or obligation to update any forward-looking statements as a result of developments occurring after the date of this presentation.

Non-GAAP Financial Measures

This press release includes financial results prepared in accordance with accounting principles generally accepted in the United States (GAAP), and also certain historical and forward-looking non-GAAP financial measures. In particular, Acorda has provided non-GAAP net income, adjusted to exclude the items below, and has provided 2016 guidance for R&D and SG&A on a non-GAAP basis. Non-GAAP financial measures are not an alternative for financial measures prepared in accordance with GAAP. However, the Company believes the presentation of non-GAAP net income when viewed in conjunction with our GAAP results, provide investors with a more meaningful understanding of our ongoing and projected operating performance because this measure excludes (i) non-cash charges and benefits that are substantially dependent on changes in the market price of our common stock, (ii) non-cash interest charges related to the accounting for our outstanding convertible debt which are in excess of the actual interest expense owing on such convertible debt as well as non-cash interest charges related to our asset based loan and acquired Biotie debt, (iii) changes in the fair value of acquired contingent consideration which do not correlate to our actual cash payment obligations in the relevant period, (iv) non-cash tax expenses related to our tax accounting which do not correlate to our actual tax payment obligations, (v) realized foreign currency transaction gains and losses, and (vi) acquisition related expenses. The Company believes its non-GAAP net income measure helps indicate underlying trends in the company's business and is important in comparing current results with prior period results and understanding projected operating performance. Also, management uses non-GAAP financial measure to establish budgets and operational goals, and to manage the company's business and to evaluate its performance.

In addition to non-GAAP net income, we have provided revised 2016 guidance for R&D and SG&A on a non-GAAP basis. Due to the forward looking nature of this information, the amount of compensation charges and benefits needed to reconcile these measures to the most directly comparable GAAP financial measures is dependent on future changes in the market price of our common stock and is not available at this time. The range of SG&A expenditures for 2016 also excludes expenses related to the acquisition of Biotie because of the extraordinary nature of these expenses. The Company believes that this non-GAAP measure provides investors with a more meaningful understanding of our ongoing and projected SG&A expenses.

A reconciliation of the historical non-GAAP financial results presented in this release to our GAAP financial results (but not the 2016 guidance for R&D and SG&A) is included in the attached financial statements.

Financial Statements
   
Acorda Therapeutics, Inc.
Condensed Consolidated Balance Sheet Data
(in thousands)
(unaudited)
 
June 30, December 31,
2016 2015
Assets
Cash, cash equivalents, short-term and long-term investments $ 137,400 $ 353,305
Trade receivable, net 45,886 31,466
Other current assets 24,325 30,070
Finished goods inventory 55,553 36,476
Deferred tax asset 13,245 2,128
Property and equipment, net 36,754 40,204
Goodwill 284,504 183,636
Intangible assets, net 751,524 430,856
Other assets   8,465   3,153
Total assets $ 1,357,656 $ 1,111,294
 
Liabilities and stockholders' equity
Accounts payable, accrued expenses and other current liabilities $ 125,942 $ 80,391
Current portion of deferred license revenue 9,057 9,057
Current portion of notes payable 1,126 1,144
Convertible senior notes 294,854 290,420
Contingent consideration 71,700 63,500
Non-current portion of deferred license revenue 36,984 41,513
Deferred tax liability 101,077 12,146
Other long-term liabilities 35,374 10,098
Total stockholder's equity - Acorda Therapeutics   671,638   603,025
Noncontrolling interest   9,904   -
Total Stockholders' equity   681,542   603,025
Total liabilities and stockholders' equity $ 1,357,656 $ 1,111,294
 
       
Acorda Therapeutics, Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
 
Three Months Ended Six Months Ended
June 30, June 30,
2016 2015 2016 2015
Revenues:
Net product revenues $ 120,695 $ 107,565 $ 230,842 $ 201,064
Royalty revenues 4,499 3,878 7,990 7,966
License revenue   2,264     2,264     4,529     4,529  
Total revenues 127,458 113,707 243,361 213,559
 
Costs and expenses:
Cost of sales 26,435 22,708 49,621 41,155
Cost of license revenue 159 159 317 317
Research and development 50,293 31,229 94,863 61,865
Selling, general and administrative 53,056 52,819 104,838 101,589
Acquisition related expenses 9,548 - 16,746 -
Change in fair value of acquired contingent consideration   2,000     1,100     8,200     4,200  
Total operating expenses 141,491 108,015 274,585 209,126
                       
Operating (loss) income $ (14,033 ) $ 5,692 $ (31,224 ) $ 4,433
 
Other (expense) income, net   (5,896 )   (3,565 )   1,037     (7,430 )
(Loss) income before income taxes (19,929 ) 2,127 (30,187 ) (2,997 )
Benefit from (provision for) income taxes 972 (1,130 ) 10,709 909
                       
Net (loss) income $ (18,957 ) $ 997 $ (19,478 ) $ (2,088 )
 
Net loss attributable to noncontrolling interest   678     -     678     -  
Net (loss) income attributable to Acorda Therapeutics, Inc. $ (18,279 ) $ 997   $ (18,800 ) $ (2,088 )
 
Net (loss) income per common share - basic $ (0.40 ) $ 0.02 $ (0.42 ) $ (0.05 )
Net loss per common share - diluted $ (0.40 ) $ 0.02 $ (0.42 ) $ (0.05 )
Weighted average per common share - basic 45,338 42,085 45,077 42,058
Weighted average per common share - diluted 45,338 43,282 45,077 42,058
 
       
Acorda Therapeutics, Inc.
Non-GAAP Income and Income per Common Share Reconciliation
(in thousands, except per share amounts)
(unaudited)
 
Three Months Ended Six Months Ended
June 30, June 30,
2016 2015 2016 2015
 
GAAP net (loss) income $ (18,957 ) $ 997 $ (19,478 ) $ (2,088 )
Pro forma adjustments:
Non-cash interest expense (1) 2,360 2,128 4,564 4,230
 
Non-cash tax benefit (2) (3,393 ) 550 (13,287 ) (2,232 )
 
Change in fair value of acquired contingent consideration (3) 2,000 1,100 8,200 4,200
 
Acquisition related expenses (4) 9,548 - 16,746 -
 
Realized foreign currency loss (gain) (5) 2,551 - (7,738 ) -
 
Share-based compensation expenses included in R&D 2,616 2,159 4,737 3,982
Share-based compensation expenses included in SG&A   6,656     6,549     12,694     11,853  
Total share-based compensation expenses 9,272 8,708 17,431 15,835
                       
Total pro forma adjustments 22,338 12,486 25,916 22,033
                       
Non-GAAP net income $ 3,381   $ 13,483   $ 6,438   $ 19,945  
 
Net income per common share - basic $ 0.07 $ 0.32 $ 0.14 $ 0.47
Net income per common share - diluted $ 0.07 $ 0.31 $ 0.14 $ 0.46
Weighted average per common share - basic 45,338 42,085 45,077 42,058
Weighted average per common share - diluted 46,028 43,282 46,036 43,434
 
(1) Non-cash interest expense related to convertible senior notes, asset based loan, and Biotie debt.
(2) $2.4 million and $0.6 million paid in cash taxes in the three months ended 2016 and 2015, respectively; $2.6 million and $1.3 million paid in cash taxes in the six months ended 2016 and 2015, respectively.
(3) Changes in the fair value of the acquired contingent consideration related to the Civitas acquisition.
(4) Transaction expenses related to the Biotie acquisition.
(5) Realized foreign currency loss (gain) related to the Biotie transaction included in Other (expense) income, net in the Consolidated Statements of Operations.

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