Scopia Capital Management LP, the owner of roughly 17% of Acorda Therapeutics Inc.'s common stock, called on the drugmaker's board to review all strategic alternatives, including a sale of the company.
In an Aug. 7 letter, Scopia Capital said the investor has been supportive of the company's strategy to this point. However, it now believes it is time to sell the company, adding that in 2018 the business will revert to "burning cash with a levered balance sheet and no clear timeline to return to profitability."
The investor believes that continuing to follow an independent strategy presents significant risk for stockholders. It also urged the board to appoint a special committee of independent directors to oversee a review of all strategic alternatives to maximize value.
"We are highly confident that multiple qualified, potential buyers would be interested in engaging with Acorda at a significant premium to its present value," Scopia Capital said.
Scopia Capital said that it believes in the value of Inbrija but that it will take time to launch and will likely only replace Ampyra revenue, while Tozadenant may or may not succeed in its phase 3 trial. "That is a lot of development risk for shareholders to bear," the investor said.
The letter comes after a judge invalidated several patents for Acorda's Ampyra. The company plans to appeal the ruling.
Acorda responded by saying it welcomes open communications with all shareholders and values their constructive input, and it has thoroughly considered options to enhance shareholder value as it regularly does.
The company said a sale at this time would not "adequately compensate shareholders" for the potential benefits of its late-stage programs and initiating a sale process or a public review of strategic alternatives would destabilize operations, hinder its ability to execute its business plan and risk significantly devaluing the company.
Acorda said it is taking steps to implement its focused plan on value creation. It has diversified its portfolio and invested in its late-stage pipeline, including Inbrija and Tozadenantz for Parkinson's disease, and has reduced operating expenses by about $50 million in 2017.