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Biotech / Medical : Acorda Therapeutics Inc. -- Ignore unavailable to you. Want to Upgrade?

To: kenhott who wrote (56)	10/7/2009 10:44:31 AM
From: kenhott	Read Replies (1) \| Respond to of 120

Don't have that much time so I will just make a couple of comments. I am positive about ACOR. It is not going to do like a 5x. To me, it is about risk adjusted returns and because ACOR is a complicated story, the market has "better" fish in a barrel to shoot. But risk adjusted, ACOR is a decent investment story. SAFETY is a perceived problem with regular fampridine and FampridineSR. We know regular fampridine pretty well and its safety issues. ACOR's FampridineSR is a sustained release of regular fampridine. The devil we know gives comfort to me that the focused development approach in SR will bring thru a well characterized drug at 10mg bid. The FDA will require ACOR to have a strong Risk Control Plan for SR. Patients can get regular fampridine from a compounding pharmacy. There is no Risk Control Plan or much else when you get your fampridine from a compounding pharmacy. If you are concern about the safety of this drug (and I believe the risks are real), FampridineSR will be the safest option for all the obvious reasons. If we forget about costs for a moment, docs and patients should want to be on the safest drug. And legally, there are real issues about prescribing a compounded product vs. SR if/when things go wrong. Some people don't believe that the drug is very effective. They read the results of the phase 3 trials and see a low response rate, like 36%. So what good is a drug that only works on 36% of the patients? The answer is that the response rate score is a decently high hurdle and is just one way to measure in-patient benefits. Let's start by noting that most MS patients over time will have increasing mobility issues. Most of us, people who are lucky and healthy, don't understand how we take our movements for granted. Try going for a day without the use of one arm and we can quickly appreciate how desperate one can be about retaining the use of our bodies. So some smallish % of people have great responses to FampridineSR. And 36% have a good response to FampridineSR. Now I believe there are a good number of people who will get Enough benefits from FampridineSR to keep them on the drug even if they are not "Responders". If you look at the long term follow up studies of FampridineSR, you will see first of all that 90% of the patients decided to go into the two long term studies. That percentage shows how important this overall issue is to the patients. In the older of the two extension studies, 70% of the enrollees are still on the drug after ~3 years. In the newer of the two extension studies, 85% of the enrollees are still on the drug after ~15 months. Docs who knows, and the numbers from the extension studies show the potential real world impact of this drug. I will also point out that because of the way this drug works, improving conductivity, one would expect it to provide other benefits beyond just walking better. Like this: Message 25933718 FampridineSR Cost is a concern re: the potential sales of this drug. The competition for FampridineSR is a compounded product but not a generic. The cost to buy compounded fampridine is like $750 per year, out of pocket. That is like $60 per month. People are comparing the cost of FampridineSR at $10k per year to $750 per year for compounded drug. But the real comparison in most cases is the co-pay for FampridineSR vs. $750 per year. So if the co-pay for FampridineSR is $60 for a 30 day script, the out-of-pocket is equivalent to compounding. While at the onset, ACOR has to be "conservative" about pricing, I will suggest that once the drug has been on the market for awhile and accepted, pricing can become more aggressive. The current healthy bill going thru congress will only help drugs like FampridineSR by expanding patient insurance coverage. Profit potential. There are like 400,000 MS patients in the U.S. Majority of these patients will have walking issues. The total market size is $4B at $10k per year. We can all pick our own percentage to get to a sales number for the U.S. Rest of the world is marketed by BIIB with a decent royalty rate. BIIB will also pay the sub-royalties to Elan which is high single digits. Something that might be lost on investors is that ACOR will self-market FampridineSR in the U.S. That means ACOR will have all the leverage of increasing U.S. sales. Also a good part of the sales costs will be covered by the sales of ACOR's other product, Zanaflex. I know Zanaflex is being challenged by a generic but my best guess is that ACOR will "win" at the end. Valuation. At $23 a share, ACOR is valued net of cash at ~$650Mish. Finally, other competitions, Nerispirdine by Sanofi. As far as I know they are in between phase 2 and 3 and will be ~2 years behind ACOR. It is a long road between phase 2 and an approved FDA product. Finally finally I like ACOR's early pipeline. Very early however. Finally finally finally, this post was not very short.