Court nixes Acorda patents, teeing up Ampyra generics—and potential cost cuts, analyst says

Acorda Therapeutics’ IP protection on Ampyra may have held up against pharma patent challenger Kyle Bass at the U.S. Patent and Trademark Office, but it didn't do the same in court.

Friday, a U.S. District Court stamped out four of the company's five patents on the med for multiple sclerosis patients, dubbing them invalid on the grounds of obviousness. It kept just one—a sustained-release patent set to expire in mid-2018—meaning generic competition in 2018 is “realistic,” Leerink Partners analyst Paul Matteis wrote in a note to clients.

Ardsley, NY-based Acorda, unsurprisingly, plans to appeal the decision, but it’s not going to sit back and wait for an about-face in court. The company has developed contingency plans for early Ampyra generics, and it "will provide an update after finalizing the implementation timeline,” it said in a statement.

Those plans are likely to include big cost reductions; the way Matteis sees it, Acorda could have “a fairly aggressive restructuring” in mind. At February’s Leerink Global Healthcare Conference, company CEO Ron Cohen “noted that in case of a negative court decision, Acorda will ‘cut spending and cut it significantly.'"

"[I]n our view, 2018-2020 Acorda revenue/EPS consensus estimates now look far too high,” Matteis noted.

The court blow follows a triumph at the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board, which last month shut down hedge fund manager Bass’ attempt to nix Acorda’s IP shields, through use of the inter partes review process. Acorda needed to follow up with a win in court, however, to keep generics makers at bay.

Meanwhile, the multiple sclerosis space could face more payer pressure than ever thanks to last week’s arrival of Ocrevus, a cheaper-than-average infusion option from Roche. The field is already expecting some key generics to hit the scene in the not-too-distant future, too, with copies of Novartis’ oral med Gilenya predicted for 2019. Ampyra is approved to improve walking in MS patients.