Monday, March 2, 2015

Acorda Update

I pointed out in my Seeking Alpha article February 23rd titled Acorda 2015: Patents, Pipeline and Patients, Cash and Catalysts  that among the positive and negative catalysts for 2015 might be one negative that Kyle Bass would file 4 more challenges to each of the additional 4 patents on which there had not yet been a filing. The first filing had taken place on February 10th and, as if on cue, a second filing with the U.S. Patent and Trademark Office was made on Friday, February 27. This second filing drove the stock price down further, closing at $33.84. I see a possible "death of a thousand cuts" scenario where every 2 weeks, Bass announces another filing. Acorda's CEO, Ron Cohen, referred to the effort as a "water torture" scenario, without elaborating at the Cowen Group 35th Annual Healthcare Conference on March 2nd. Given this intensifying patent battle, investors may want to consider sitting on the sidelines for awhile and coming back into it once the smoke begins to clear.
On the other hand and on a more positive note, Cohen made reference to a private study a few months ago by Decision Resources that puts the peak revenue potential of CVT-301 (the Parkinson's rescue therapy) at 700 to 800 million, thus higher than the previous "over 500 million" more conservative figure that had earlier been discussed.

March 15th Note: Short shares of Acorda from January 30, 2015 to February 27, 2015 have been driven from 11% of float to 17.8% or 7,434,503 shares.

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