Patent decision puts 95% of Acorda revenue at risk
- Acorda Therapeutics' stock has crashed down by over 21% on the news that four patents for its key product, Ampyra (dalfampridine), have been invalidated because of obviousness.
- The patents affected are U.S. Patent Nos. 8,663,685 (the ‘685 patent); 8,007,826 (the ‘826 patent); 8,440,703 (the ‘703 patent; and 8,354,437 (the ‘437 patent). The company will appeal the ruling on these patents. U.S. patent No. 5,540,938 (the ‘938 patent) remains but expires in July 2018.
- Ampyra, which is a treatment for muscle weakness associated with multiple sclerosis, makes up 95% of Acorda's revenue.
Back in 2015, Kyle Bass of the Coalition for Affordable Drugs (ADORCA) attempted to overturn two of the patents for Acorda Therapeutics' Ampyra, but the petition was overturned by the United States Patent and Trade Office (USPTO). On March 9, 2017, the Patent and Trial Appeal Board ruled that ADORCA's evidence did not demonstrate unpatentability, strengthening the company's patent portfolio.
However, this relief didn't last for long, with the news on March 31 of the patent invalidation of four of the Ampyra patents, clearing the way for generics, potentially within the next year or so.
"We are disappointed by the Court’s decision and are preparing our appeal," said Ron Cohen, Acorda's president and CEO. "Medical innovation depends on the recognition of valid intellectual property claims. We believe that we demonstrated novel and unexpected findings in our Ampyra development program that led to the issuance of valid patents."
According to Acorda's rather brief press statement, "the company has developed contingency plans to address its business needs and objectives in the event of a loss of Ampyra exclusivity, and will provide an update after finalizing the implementation timeline."
However, the patent invalidation could knock the company sideways, by slashing its only real revenue stream. Despite having three FDA-approved products on the market, Ampyra made up just a shade short of 95% of Acorda's revenue last year at $492.8 million.
As recently as the company's fourth quarter 2016 update, Acorda was predicting sales of $535 million to $545 million for 2017 for Ampyra, based on the growth rate of 24% CAGR over 2010 to 2016. As Ampyra was covered by five patents, and this decision has invalidated four of them, this financial outcome is can no longer be guaranteed after the loss of exclusivity.
Acorda does have a pipeline of products in development, but these are still a little way off the market. Submission for marketing approval of CVT-301, which has completed Phase 3 clinical trials as an inhaled treatment for Parkinson's disease, is planned for the second quarter 2017. Phase 3 trials are ongoing for tozadenant, also in Parkinson's disease. Ampyra's development as a treatment for post-stroke walking difficulties was discontinued after its failure in the MILESTONE clinical study in late 2016.
- Acorda Therapeutics Statement
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