As it is evident from a chart, Acorda has experienced a remarkable run over the last six months, rising from a low of nearly $2 per share to its current price of more than $24 per share. According to Loeb, this rise is the result of the Phase III results of Fampridine-SR for walking improvement in multiple sclerosis patients. However, while the company has done extraordinarily well at developing this (seemingly) successful MS drug, Loeb feels "a larger, more experienced company would be able to expedite Fampridine-SR through the FDA and into the hands of patients more quickly and efficiently." Therefore, Loeb feels the board of directors should hire an investment bank to pursue the sale of the company.
In addition to pursuing the company's sale, he feels the company's board should forego the recently announced plan "to partner Fampridine-SR only in Europe." Although the desire to retain all the profits made in the United States seems logical, this plan would be a "tremendous injustice" to multiple sclerosis patients in the United States and the company's public shareholders. Partnering only in Europe would hurt American MS patients because they would not receive a drug that would most certainly ease their pain and potentially save their life in the fastest way possible. It would hurt shareholders of the company because it would "drastically impair if not eliminate the level of interest from potential acquirers of ACOR," according to Loeb's letter.
Toward the end of his letter, Loeb said "there would be several potential interested buyers and that the acquisition price would be significantly in excess of the current market valuation" according to the evaluation and analysis performed by Third Point. Disappointingly, when the board responded to Third Point's statements on Friday, the response was generic and lacking depth. The company pulled the generic "continually evaluates ways to maximize shareholder value"-card -- a pretty overly used way to say "we are trying to do our job and keep ours at the same time."
It will be interesting to see if anything becomes of Loeb's criticisms. Hopefully Acorda's management acts in the best interest of both shareholders and the poor people suffering from multiple sclerosis. If not, I fully expect Loeb to fight management and use his 10% ownership of the company and activist abilities to his advantage.
It will be interesting to see if anything becomes of Loeb's criticisms. Hopefully Acorda's management acts in the best interest of both shareholders and the poor people suffering from multiple sclerosis. If not, I fully expect Loeb to fight management and use his 10% ownership of the company and activist abilities to his advantage.
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