Acorda offloads manufacturing operations to Catalent for $70M amid latest restructuring to keep the ship afloat
Just over a year after the Supreme Court quashed any hopes Acorda had of protecting its once-lucrative multiple sclerosis drug Ampyra from cheaper knockoffs, the New York biotech continues to bleed cash. Now, as part of its third restructuring since 2017, the drugmaker is offloading one of its key assets.
As part of a sweeping overhaul Acorda will sell its manufacturing operations for Inbrija — an inhaled powder formulation of levodopa — to Catalent for $70 million in upfront cash that will save Acorda an additional $10 million.
Catalent will absorb all Acorda employees who work at the Chelsea, MA facility, but that’s not the case for much of the company’s remaining workforce. CEO Ron Cohen announced that between the Ardsley, NY headquarters and its Waltham, MA facility, Acorda would lay off roughly 16% of its workforce.
Cohen portrayed the restructuring, which is estimated to reduce operating expenses by $40 million, as “difficult” but needed, and a way to bolster Acorda’s balance sheet and ensure that the supply of Inbrija was not interrupted.
“The restructuring is necessary for Acorda to have an infrastructure and expenses that are right-sized for our products and revenue,” Cohen said. “This is a difficult step for us all, not least for those who will no longer be employed at the company.”
The sale of the manufacturing operations is expected to close in the first quarter, the company said in a press release.
Acorda on Wednesday also announced it had entered into a $15.25 million at-the-market offering, which comes less than two weeks after a reverse 1-for-6 stock split. That split reduced the company’s total stock shares from 371 million to 61.6 million after the stock price had fallen below the required $1 per share price to continue trading on the Nasdaq.
The company last restructured in October, when Cohen slashed a quarter of Acorda staff while cutting back R&D and SG&A expenses after Ampyra revenue plummeted and Inbrija revenue wasn’t nearly enough to make up the difference. Ampyra revenue continued to drop in Q4, falling from $37 million in Q3 to $25 million (the drug brought in $138 million in net revenue in 2018 Q3).
In 2017, Acorda laid off 20% of its staff (which at the time amounted to over 100 staffers) in an effort to preempt looming losses over the Ampyra patent debacle. That move saved the company $21 million, but those moves didn’t ultimately staunch the bleeding.
Acorda didn’t announce specifics Wednesday on any plans to restructure its debt — which Endpoints News reported in October sat around $345 million — other than to say the manufacturing operations sale would provide more flexibility to “reduce” debt.