What happened

Acorda Therapeutics (NASDAQ:ACOR) shares fell 15% on Tuesday to $16.16 following word Goldman Sachs cut its rating to "sell" and reduced its price target on the biotech by nearly 50% to $10 per share. 

So what

Goldman Sachs' pessimism stems from a recent court decision invalidating patents preventing generic competition to Ampyra, Acorda Therapeutics' multiple sclerosis drug.

A man sits on a sidewalk with head in hands in front of a wall showing a declining share price chart.

IMAGE SOURCE: GETTY IMAGES.

The patent decision is a big blow to because Amprya accounted for $543 million of the company's $588 million in revenue in 2017 and $138 million of its $140 million in revenue in the third quarter of 2018.

In addition to the prospect of declining revenue due to generic entrants, there's also uncertainty associated with the upcoming FDA decision on Inbrija, an inhaled formulation of levodopa, a Parkinson's disease drug. The FDA was expected to issue a decision on Inbrija in October; however, it pushed its decision back to Jan. 5. 

Now what

Acorda Therapeutics has said it thinks Inbrija's peak sales could reach $800 million someday. That may be an optimistic forecast, however, and even if it isn't, there's no certainty that the FDA will approve Inbrija. In August 2017, the FDA refused to file Acorda Therapeutics' initial application for Inbrija, requesting more information, and in September, it delayed its decision on the resubmitted application for Amprya so that it could review additional information it had requested from the company.

Absent an Inbrija green light, next year could be a tough year for sales at Acorda Therapeutics, so investors are probably best served watching this one from the sidelines until there's more clarity about Inbrija's future.