Acorda Joins Growing Group of Biotechs Filing for Bankruptcy, Divests Assets to Merz
03 Apr 2024
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Pictured: Man holding a Chapter 11 bankruptcy filing/iStock, designer491
Acorda Therapeutics on Monday announced that it has voluntarily filed for bankruptcy and is seeking Chapter 11 protections to facilitate the orderly transfer of its assets and the winding down of its business operations.
The company has also entered into an asset purchase agreement with German biotech Merz Therapeutics, which has agreed to acquire “substantially all” of Acorda’s assets, including its FDA-approved drugs Inbrija (levodopa inhalation powder), Ampyra (dalfampiridine) and Fampyra (fampiridine), for $185 million.
The sale will take place through a competitive auction process, with Merz acting as a “stalking horse” bidder.
Acorda’s shares tanked 59% in after-hours trading in reaction to the news, according to Seeking Alpha.
The decision to Chapter 11 bankruptcy was made “following an exhaustive process” and lengthy strategic review of its options for the business moving forward, CEO Ron Cohen said in a statement. Acorda contends that filing for bankruptcy “is in the best interest” of stakeholders.
“One of our top priorities is to ensure an uninterrupted supply of our medications to people with multiple sclerosis and Parkinson’s disease,” Cohen added. “We are confident that Merz TherapeuticsMerz Therapeutics, if they are the ultimate acquirer, will be able to seamlessly continue serving these patients’ needs.”
Acorda’s Chapter 11 proceedings will take place in the U.S. Bankruptcy Court for the Southern District of New York. If the court approves and grants certain protections, Acorda will be able to continue its normal operations as it works to wind down the company’s business.
Court approval will also allow Acorda to “minimize” the effects of its bankruptcy on employees, clients, patients and other stakeholders, according to the company.
Monday’s bankruptcy announcement puts an end to Acorda’s years of financial struggles. In 2019, the company launched a restructuring initiative that saw 25% of its employees laid off, in an attempt to save $21 million.
In September 2021, Acorda slashed its headcount by another 15%, hoping to cut costs by around $20 million per year, starting in 2022. The company at the time also shuffled its masthead, including a change in its CCO and COO positions.
In January 2024, Acorda also lost a high-powered partner when Biogen opted to return the ex-U.S. licensing rights over Fampyra. The termination of the partnership is scheduled to take effect on Jan. 1, 2025.
With its bankruptcy announcement on Monday, Acorda joins a growing group of biotech companies that have shuttered their businesses this year.
On Monday, Eiger BioPharmaceuticals announced that it also filed for Chapter 11 bankruptcy and would wind down its operations. In January 2024, Athersys revealed that it had gone bankrupt and would divest its assets to its research partner Healios.
Tristan Manalac is an independent science writer based in Metro Manila, Philippines. Reach out to him on LinkedIn or email him at tristan@tristanmanalac.com or tristan.manalac@biospace.com.
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