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Why Is Acorda (ACOR) Down 46.8% Since Last Earnings Report?

Zacks Equity Research

A month has gone by since the last earnings report for Acorda Therapeutics (ACOR). Shares have lost about 46.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Acorda due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Acorda Q2 Earnings and Revenues Surpass Estimates

Acorda reported second-quarter 2019 loss per share of 55 cents, narrower than the Zacks Consensus Estimate of a loss of $1.06. However, the figure came in against the year-ago earnings of $1.40.

Meanwhile, the company generated total revenues of $50.1 million in the second quarter, comprehensively beating the Zacks Consensus Estimate of $26.2 million. However, sales tumbled 67.3% year over year due to lower sales of Ampyra.

Quarter in Detail

Inbrija was launched in February this year and generated sales of $3 million in the reported quarter, reflecting a significant sequential increase. An approximately 4,500 prescription request forms for Inbrija were received through July 2019.

Majority of Acorda’s net product revenues were drawn from the company’s Ampyra, which raked in sales of $44.2 million in the quarter, reflecting a huge 70.6% slump year over year due to generic competition. However, sales improved 10.2% sequentially. On a positive note, Ampyra sales were higher than the company’s internal projections in the second quarter because sales erosion due to generic launches was less severe.

Acorda still believes that Ampyra sales will see a sharp decline in the quarters ahead in 2019.

Meanwhile, royalty revenues were $2.8 million in the quarter, almost in line with the year-ago quarter’s figure.

Acorda’s research and development (R&D) expenses (excluding share-based compensation expenses) were $18.2 million, down 25.4% year over year.

Selling, general and administrative (SG&A) expenses (excluding share-based compensation expenses) were $46.7 million, up 15% year over year.

Acorda had $296.9 million cash, cash equivalents and investments as of Jun 30, 2019 compared with $343.3 million as of Mar 31, 2019.

2019 Guidance

Acorda expects Ampyra revenues to exceed $140 million for the full year. Previously, the company decided not to provide any outlook for Ampyra due to its waning revenues, induced by the entrance of generics.

The company expects full-year R&D and SG&A expenses (excluding share-based compensation) in the band of $70-$80 million and $200-$210 million, respectively.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted 22.22% due to these changes.

VGM Scores

At this time, Acorda has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Acorda has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.



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