On March 9, 2023 Acorda Therapeutics, Inc. (Nasdaq: ACOR) reported its financial results for the fourth quarter and full year ended December 31, 2022 (Press release, Acorda Therapeutics, MAR 9, 2023, View Source [SID1234628404]).
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"Acorda’s operating and financial performance improved throughout the year, meeting our financial guidance for 2022 AMPYRA net revenue, INBRIJA U.S. net revenue, cash, and adjusted OPEX. We also delivered a stream of business successes that have driven shareholder value," said Ron Cohen, M.D., Acorda’s President and Chief Executive Officer.
"These successes included a substantial AMPYRA arbitration award and markedly lower cost of goods for AMPYRA going forward, renegotiation of our agreements with Catalent for INBRIJA manufacturing on more favorable terms, the launches of INBRIJA in Germany and Spain, and obtaining an extension from Nasdaq to bring the company’s share price back into compliance with Nasdaq listing requirements," he continued.
"In 2023 we expect to make further progress in reducing operating expenses, increasing INBRIJA’s trajectory, and maintaining the strength of the AMPYRA brand. We are also in active discussions for additional agreements to commercialize INBRIJA in multiple ex-U.S. territories; and we also expect Biopas to launch in Latin America in early 2024."
Fourth Quarter 2022 Financial Results
For the quarter ended December 31, 2022, the Company reported INBRIJA U.S. net revenue of $9 million, a 13.1% decrease compared to the same quarter in 2021. The Company did not report any ex-U.S. INBRIJA sales in the fourth quarter for either period.
For the quarter ended December 31, 2022, the Company reported AMPYRA net revenue of $18.8 million, a 16.6% decrease compared to the same quarter in 2021. Additionally, for the quarter ended December 31, 2022, the Company reported FAMPYRA royalty revenues of $2.7 million, a 25.1% decrease compared to the same quarter in 2021. As previously disclosed, AMPYRA lost its exclusivity and generics entered the market in 2018, and the Company expects AMPYRA revenue to continue to decline. The decline in royalty revenues is largely attributed to the launch of generic competition in the German market in 2022.
Research and development (R&D) expenses for the quarter ended December 31, 2022 were $1.2 million, including negligible share-based compensation expenses, compared to $1.4 million, including $0.1 million of share-based compensation for the same quarter in 2021.
Sales, general and administrative (SG&A) expenses for the quarter ended December 31, 2022 were $26.3 million, including $0.2 million of share-based compensation, compared to $28.4 million, including $0.4 million of share-based compensation for the same quarter in 2021.
Provision for income taxes for the quarter ended December 31, 2022 was $2.4 million, compared to a provision for income taxes of $1.7 million for the same quarter in 2021.
The Company reported net income of $19.1 million for the quarter ended December 31, 2022, or $0.79 per basic share and $0.57 per diluted share. Net loss in the same quarter of 2021 was ($20.6) million, or a net loss of ($1.73) per share on both a basic and diluted basis. The increase in net income is primarily driven by recognition of a gain upon extinguishment of debt of a subsidiary of $27.1 million, and receipt of an arbitration award of $18.3 million, reduction in the change in fair value of contingent consideration of $3.1 million, and reduced R&D and SG&A expenses of $2.3 million, partially offset by a one-time contract termination fee of $4 million, and reduced net revenues of $5.5 million.
Full Year Ended December 31, 2022 Financial Results
For the full year ended December 31, 2022, the Company reported INBRIJA global net revenue of $30.9 million, $28 million of which was derived from sales in the U.S., and $2.9 million from ex-U.S. sales, compared to $29.6 million net revenue for the full year 2021, which was derived from U.S. sales only.
For the full year ended December 31, 2022, the Company reported AMPYRA net revenue of $72.9 million, compared to $84.6 million for the full year 2021. Additionally, for the full year ended December 31, 2022, the Company reported FAMPYRA royalty revenues of $11.7 million, compared to $13.8 million for the full year ended 2021. This decline in royalty revenues is largely attributed to the launch of generic competition in the German market in 2022.
Research and development (R&D) expenses in 2022 were $5.8 million, including $0.1 million of share-based compensation, compared to $10.4 million, including $0.7 million of share-based compensation for the full year 2021.
Sales, general and administrative (SG&A) expenses were $106.3 million, including $1.4 million of share-based compensation, compared to $124.4 million, including $2.3 million of share-based compensation, for the full year 2021.
Provision for income taxes was $30.7 million, compared to a benefit from income taxes of $5.1 million for the full year 2021. This change is a result of the elimination of Net Operating Losses ("NOLs") due to a Section 382 change in control due to cumulative changes in the Company’s ownership over the preceding three years, driven by the Company’s interest payment of 2024 convertible senior secured notes in shares in June 2022, which required the write-off $57.9 million of NOLs.
The Company reported net loss of ($65.9) million, or a net loss of ($3.34) per basic and diluted share, compared to a net loss of ($104) million, or a net loss of ($9.79) per basic and diluted share for the full year ended 2021. The decrease in net loss is primarily driven by a gain upon extinguishment of debt of a subsidiary of $27.1 million, reduced R&D and SG&A expenses of $22.8 million, receipt of an arbitration award of $18.3 million, increase of the gain recognized in the change in fair value of contingent consideration of $9.6 million, and reduced cost of sales of $10.5 million, partially offset by an increased provision for income taxes of $35.8 million, lower net revenues of $10.5 million, and a one-time contract termination fee of $4 million.
At December 31, 2022, the Company had cash, cash equivalents, and restricted cash of $44.7 million compared to $65.2 million at year end 2021. Restricted cash includes $6.2 million in escrow related to the 6.00% semi-annual interest portion of the convertible notes.
Early 2023 / 2022 Highlights
In March 2023, Esteve announced that they had launched INBRIJA in Spain.
In February 2023, a Nasdaq Hearings Panel granted an extension until June 20, 2023 to comply with listing requirements and remain listed on the Nasdaq Global Select Market.
In January 2023, Acorda entered into a new long-term, global supply agreement with Catalent to significantly lower minimum purchase requirements for INBRIJA in 2023 and 2024; and beginning in 2025, Acorda will pay a fixed, per-capsule price for INBRIJA.
In December 2022, Acorda obtained waivers from the Finnish government of approximately $27.1 million in loans related to its Biotie subsidiary.
In December 2022, Acorda made a cash interest payment of approximately $6.2 million related to its Convertible Senior Secured Notes Indenture ("2024 Notes").
In November 2022, Acorda stockholders approved a reverse stock split, which can be utilized by the Company to regain compliance with the listing requirements for the Nasdaq Global Select Market.
In October 2022, Acorda was awarded a total of $18.3 million, including interest, through an arbitration involving a dispute with Alkermes over AMPYRA royalties. As a result, Acorda will no longer have to pay Alkermes any royalties on net sales for AMPYRA. In addition, Acorda is free to use alternative sources for supply of AMPYRA which it has secured. The Company estimates that as a result its cost of goods for Ampyra in 2023 will be lower by $10 million – $12 million.
In August 2022, Acorda announced a license agreement with Asieris Pharmaceuticals relating to its preclinical asset, Nepicastat. Acorda received an upfront payment of $0.5 million, and is eligible to receive up to an additional $7 million based on the achievement of regulatory milestones and royalties on future net sales of any product developed.
In June 2022, Acorda met its obligation to HealthCare Royalty Partners and received the full benefit of the royalty payments from Biogen on FAMPYRA sales.
In June 2022, Esteve launched INBRIJA in Germany and Acorda received $2.9 million in revenue related to this launch.
In May 2022, Acorda announced an agreement with Biopas Laboratories to commercialize INBRIJA in the nine largest markets in Latin America, including Brazil and Mexico. Acorda will receive a significant, double-digit, tiered percentage of the selling price of INBRIJA and will also receive sales-based milestones.
2022 Financial Guidance2
For the full year 2022, the Company achieved its guidance targets for INBRIJA U.S. net revenue of $28 million, AMPYRA net revenue of $72.9 million, adjusted OPEX of $112 million, and ending cash balance of $44.7 million.
For the full year 2022, adjusted EBITDA was a loss of ($2.4) million, which fell short of guidance of $5.6 – $5.8 million. The shortfall was primarily due to a non-cash adjustment to the change in fair value of contingent consideration identified through the Company’s year-end procedures. Additionally, the Company recorded inventory write-offs given estimates of future sales compared to inventory to be received under the new global supply agreement with Catalent. There was no impact to cash.
2023 Financial Guidance
For the full year 2023, the Company is targeting INBRIJA U.S. net revenue to be $38 – $42 million.
The Company is targeting 2023 AMPYRA net revenue to be $65 – $70 million. As previously disclosed, AMPYRA lost its exclusivity and generics entered the market in 2018, and the Company expects AMPYRA revenue to continue to decline.
The Company is targeting adjusted OPEX to be $93 – $103 million and ending cash balance to be $43 – $47 million. The 2023 guidance includes the impact of the new global supply agreement with Catalent. Adjusted OPEX is described below under "Non-GAAP Financial Measures." As described below, we are unable to reconcile our adjusted OPEX guidance to GAAP due to the forward-looking nature of the adjustments that are needed to determine this information.
Updated Long-Term Financial Guidance
The financial guidance below includes non-GAAP financial measures. Adjusted OPEX for fiscal years 2024 – 2027 is described below under "Non-GAAP Financial Measures."
Long-term guidance for net revenue, 2024-2027, remains unchanged from previous guidance (other than rounding adjustments).
Long-term guidance for adjusted OPEX increased in 2024 from the previous guidance due to the expected payment of $1.0 million to support the completion of the PSD-7 for INBRIJA manufacture under the new global supply agreement with Catalent. Adjusted OPEX for 2025-2027 remains unchanged.
Guidance Ranges in
U.S.$M
2023
2024
2025
2026
2027
(unaudited)
INBRIJA U.S. net
revenue
$38 – $42
$50 – $56
$59 – $65
$63 – $70
$70 – $78
AMPYRA net revenue
$65 – $70
$62 – $68
$62 – $68
$64 – $71
$62 – $69
Adjusted OPEX
$93 – $103
$92 – $102
$93 – $103
$96 – $106
$99 – $109
Ending Cash Balance
$43 – $47
$51 – $56
$72 – $79
$97 – $107
$124 – $138
Webcast and Conference Call
The Company will host a webcast/conference call in conjunction with its fourth quarter and year end 2022 update and financial results today at 8:30 a.m. ET.
To participate in the Webcast, please use the following registration link:
View Source
If you register for the Webcast, you will have the opportunity to submit a written question for the Q&A portion of the presentation. After you have registered, you will receive a confirmation email with the Webcast details. On the day of the Webcast, you will receive an email 2 hours prior to the start of the Webcast with the link to join. The presentation will be available on the Investors section of www.acorda.com.
A replay of the call will be available from 11:30 a.m. ET on March 9, 2023 until 11:59 p.m. ET on April 8, 2023. To access the replay, please dial 1 866 813 9403 (domestic) or +44 204 525 0658 (international); access code 413769. The archived webcast will be available in the Investor Relations section of the Acorda website at www.acorda.com.
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. Non-GAAP financial measures are not an alternative for financial measures prepared in accordance with GAAP, and the calculation of the non-GAAP financial measures included herein may differ from similarly titled measures used by other companies. The Company believes that the presentation of these non-GAAP financial measures, when viewed in conjunction with actual GAAP results, provides investors with a more meaningful understanding of our ongoing and projected operating performance because it excludes (i) expenses that pertain to corporate restructurings not routine to the operation of our business, (ii) non-cash charges that are substantially dependent on changes in the market price of our common stock, and (iii) other items as set forth above that are not ascertainable at the present time. We believe these non-GAAP financial measures help indicate underlying trends in the Company’s business and are important in comparing current results with prior period results and understanding expected operating performance. Also, management uses these non-GAAP financial measures to establish budgets and operational goals, and to manage the Company’s business and evaluate its performance. In addition, management believes that adjusted OPEX is important in evaluating the administrative costs of operating the Company’s business.
Adjusted OPEX includes (i) research and development expenses and (ii) selling, general, and administrative expenses and excludes (i) costs of goods sold, (ii) amortization of intangible assets, (iii) change in fair value of derivative liability, (iv) change in fair value of acquired contingent liability, and (v) the principal-only portion of an arbitration award less one-time contract termination expenses relating to the new global supply agreement with Catalent. Adjusted EBITDA is GAAP net income (loss) before income taxes less depreciation, amortization, and interest and excluding (i) non-cash compensation charges and benefits that are substantially dependent on changes in the market price of our common stock, (ii) changes in the fair value of acquired contingent consideration which do not correlate to our actual cash payment obligations in the relevant periods, (iii) expenses that pertain to corporate restructurings which are not routine to the operation of the business, (iv) changes in the fair value of derivative liability relating to the 2024 convertible senior secured notes, (v) one-time contract termination expenses relating to the new global supply agreement with Catalent, and (vi) gain on extinguishment of debt of a subsidiary which is a non-cash charge and not related to the operation of the business.
We are unable to reconcile our guidance for these non-GAAP measures to GAAP due to the forward-looking nature of the adjustments that are needed to determine this information, which includes information regarding future compensation charges, future changes in the market price of our common stock, and changes in the fair value of derivative and contingent liabilities, none of which are available at this time.