Acorda is shifting into survival mode. And it’s going to start by axing more than 100 staffers.
PHOTO: Cohen at BIO 2016
One month after a US district court tossed four key patents on its flagship drug Ampyra, leaving it with one to stand on into next year, Acorda $ACOR is chopping 20% of its staff as it scrambles to restructure while gambling that it can field new drugs in short order. Those cuts will fall disproportionately on the company’s R&D staff, CEO Ron Cohen tells me, as Acorda circles its wagons around its two late-stage drugs while conserving its marketing muscle.
The shift calls for a move away from the early-stage clinical work at the biotech, which leaves an array of programs on the table for possible deals as Cohen’s team takes a look at monetizing assets, including its existing royalty streams. And there are other operating cost cuts being planned as well. But the CEO leaves no doubt that it’s the staff cuts that hurt.
“This is traumatic for the entire organization,” he says. But it’s up to the leaders in the group now to “hold it together and keep focused so we can move ahead.”
Cohen couldn’t specify exactly how many staffers are being cut in the restructuring, but said the company had 500 to 600 staffers and is cutting 20% of them. That cut will save the company $21 million a year.
Not on the chopping block: The marketing team. If the company does lose patent protection on Ampyra in the summer of 2018, says the CEO, the team can shift “seamlessly” to CVT-301 — provided it wins an approval on schedule after being filed later in this quarter.
Their multiple sclerosis drug Ampyra wasn’t just Acorda’s main drug, it was a lifeline and support for everything the company was planning for its pipeline. The therapy provided $493 million out of $520 million in revenue last year. And with generics looming as early as 2018 – though the company is appealing the court ruling and hasn’t given up the fight — all remaining hands will be on deck hustling up a looming NDA for its lead therapy while pushing a follow-up drug, tozadenant, for Parkinson’s through late-stage testing in early 2018.
Acorda has $159 million in cash to help fund the transition stage.
The reorganization can’t come as a surprise. Cohen has bluntly told analysts on several occasions that he was prepared to cut, and cut deep, to preserve the company in the event of a setback on the patent front.
Among the assets Cohen will look to partner or license out:
— rHIgM22, a remyelinating antibody being studied for the treatment of multiple sclerosis in a second Phase I study.
— BTT1023, a fully human monoclonal antibody that targets VAP-1 (vascular adhesion protein-1). That’s an asset from Biotie.
— Tozadenant has also aroused some interest in its uses in oncology, which could help kindle a pact.
Cohen would like to keep SYN0120, though, a dual-mechanism drug which could have broad uses in psychosis and cognition that extend further than its immediate interest in Parkinson’s disease.
It’s not what he wanted for Acorda, but Cohen sounds resolved to do what he has to to get through uncertain times.
“The fact that a single judge can completely up-end everyone’s expectations is a profound risk,” says Cohen. And in biotech, risks transcend any one area, stretching from a huge risk of clinical failure through regulatory risk, reimbursement risk and on to patent risk.
“It reemphasizes just how risky this business is,” says the CEO. Building a company in biotech requires some hard choices in navigating risk and advancing new products. And Acorda is at a crossroads.