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Acorda Stiff-Arms Investor's Demand for Sale

Shares of Acorda Therapeutics Inc. (ACOR) rose 3.62%, or 78 cents, to $22.20 Monday, August 7, after a long-term investor in the biotech called for the company "to pursue an immediate review" of its strategic options, including a sale of the entire company.

Scopia Capital Management LP, which owns roughly 7.7 million Acorda shares, or 17% of the outstanding stock, said the company in 2018 "will revert to burning cash with a levered balance sheet and no clear timeline to return to profitability" and needs a new strategy.

"Pursuing an independent strategy now is gambling with shareholder capital," wrote Scopia partner Ashu Tyagi. "Selling the company is being a responsible steward of capital. We expect the company to make the correct choice."

Acorda "crossed the Rubicon" earlier this year when its lost a court fight over patents protecting its top-selling multiple sclerosis drug Ampyra and was forced to fire roughly 100 employees, Tyagi said.

"We admire the business that you have built since founding the company over 20 years ago," Tyagi said. "The company raised $850 million in capital to develop Ampyra, add commercial infrastructure and acquire pipeline assets. Unfortunately, today the company is only valued at $1.2 billion by the public markets."

Tyagi said losing the court battle was a watershed moment for Acorda that demands a new strategy.

"Had the company prevailed in the Ampyra litigation, Acorda would have been a unique company with a path to $1 billion in revenue and significant standalone value. Unfortunately, the company was unsuccessful, and it has now crossed the Rubicon," he said.


Acorda is now adrift in "treacherous waters," Tyagi added.

He argued that recent acquisitions of both Cynapsus Therapeutics Inc. for $624 million and NeuroDerm Ltd. for $1.1 billion, two other companies focusing on treatments for Parkinson's disease and other central nervous system disorders, were a misuse of Acorda's resources. "Acorda is a more valuable acquisition candidate than either of these companies."

Although Inbrija, acquired with Civitas Therapeutics in 2014, "should launch next year and treat...


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