Friday evening is usually a good time for companies to bury bad news, but that wasn't the case for Acorda Therapeutics
Not that Acorda could have buried the news even if it wanted to. In a surprise move, the FDA announced the approval in a press release before the market closed, which made for some really wonky trading in the last few minutes. Now I realize that the agency is beholden to patients first, pharmaceutical companies a distant second, and investors don't show up on its radar screen, but is it really that hard for the FDA to wait until the markets close before issuing a press release?
Obviously, owners of Acorda's shares couldn't care less whether the stock jumped Friday afternoon or Monday morning, but I'd just as soon the FDA not give hedge funds and day traders any additional ammunition.
Back to Ampyra. The company plans to launch the drug, which will be manufactured by Elan
While the drug certainly works better than nothing and won't have any approved competition for improving walking in multiple sclerosis patients for several years, Acorda will have two issues to deal with in trying to sell the drug.
First, the active ingredient in Ampyra is often mixed with other MS drugs by pharmacies. The practice, called compounding, might produce a cheaper product, but it isn't as controlled as the normal manufacturing of an FDA-approved drug. Considering that Ampyra has a warning about risk of seizures increasing as the dose increases, it seems reasonable that most patients will be willing to pay the extra amount for FDA-approved Ampyra at controlled doses.
Acorda's bigger problem is that Ampyra only helps less than half of multiple sclerosis patients who have trouble walking -- 35% in one study, 43% in another, versus 8% and 9%, respectively, for a placebo. Multiple sclerosis is a fairly large market, but when you break it down to just the subset of people who have trouble walking, and then count only those people who respond to Ampyra, then the drug might have trouble hitting blockbuster status.
At just a $1 billion market cap, it seems investors in the company agree. Of course the herd isn't necessarily right all the time.