Acorda Therapeutics and Merz Announce Signing of “Stalking Horse” Asset Purchase Agreement

Rhea-AI Summary

Acorda Therapeutics, Inc. files for voluntary Chapter 11 protection to facilitate the sale of its assets to Merz Therapeutics for $185 million. The company aims to ensure uninterrupted patient access to INBRIJA and AMPYRA. The sale process is expected to conclude in June 2024.

Insights

Financial Analyst

The filing for Chapter 11 by Acorda Therapeutics represents a strategic move to manage its financial obligations while attempting to preserve shareholder value through the sale of its assets. The agreement with Merz Therapeutics, particularly with a $185 million bid as the baseline, sets a floor price for the auction process. This could potentially attract higher bids, creating a competitive environment that may lead to better recovery for creditors and investors.

The debtor-in-possession financing of $20 million ensures that Acorda can maintain operations and product supply, which is critical for minimizing disruption in the market and preserving the value of the assets on sale. The involvement of established advisory firms like Baker McKenzie, Ernst & Young and investment bankers suggests a well-structured and professionally managed bankruptcy process, which can be reassuring for stakeholders.

For potential investors, the key interest lies in the outcome of the auction and the final sale price, which will determine the extent of recovery from their investment in Acorda's convertible notes. The restructuring support agreement with note holders indicates a collaborative approach to the bankruptcy, potentially expediting the process and reducing legal uncertainties.

Pharmaceutical Market Analyst

Acorda's product portfolio, including INBRIJA and AMPYRA, caters to niche markets in the treatment of multiple sclerosis and Parkinson's disease. Merz Therapeutics' interest in these assets aligns with its focus on neurology and movement disorders, suggesting a strategic fit that could enhance Merz's market position.

The uninterrupted supply of medication is important for patient retention and market stability. Acorda's commitment to maintaining supply continuity throughout the bankruptcy process will help in preserving the brand equity and patient trust in its products, which are important factors during the asset sale.

Furthermore, the potential acquisition by Merz could lead to expanded resources and a more robust distribution network for these treatments, potentially increasing market penetration and benefiting patients through improved access to therapies.

Legal Expert

Chapter 11 proceedings provide a mechanism for companies like Acorda to reorganize debt and sell assets under court supervision, which can maximize asset value and creditor recovery. The 'stalking horse' bid by Merz establishes a minimum acceptable bid for the assets, which can prevent low-ball offers and set the stage for a competitive bidding process.

The involvement of legal and financial advisors indicates a complex negotiation landscape, with various stakeholders' interests needing to be balanced. The Restructuring Support Agreement with note holders suggests that a significant portion of the secured debt is being addressed cooperatively, which can streamline the Section 363 sale process.

It is also noteworthy that the court-supervised auction process is expected to conclude by June 2024, providing a clear timeline for resolution. This transparency can be beneficial for the market as it reduces the uncertainty typically associated with bankruptcy durations.

Acorda Files for Voluntary Chapter 11 Protection to Facilitate Orderly Sale

Acorda Enters into a Restructuring Support Agreement with over 90% of the Secured Convertible Noteholders

Patient Access to INBRIJA^® (levodopa inhalation powder) and AMPYRA^® (dalfampridine) to Continue Uninterrupted

PEARL RIVER, N.Y.--(BUSINESS WIRE)-- Acorda Therapeutics, Inc. (Nasdaq: ACOR) (“Acorda” or “the Company”) today announced that it has entered into an asset purchase agreement with Merz Therapeutics to purchase substantially all of the assets of Acorda, including the rights to INBRIJA, AMPYRA, and FAMPYRA for $185 million. Merz Therapeutics, a leader in the field of neurotoxins, is a business of the global family-owned company Merz, headquartered in Frankfurt am Main, Germany. To facilitate an orderly sale process, and in an effort to maximize the value for the Company's assets through a competitive auction process, with Merz serving as the "stalking horse" bidder, Acorda and certain of its affiliates filed voluntary petitions to commence Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of New York.

The decision to file for Chapter 11 protection follows a lengthy strategic review during which the Company explored a wide range of strategic options. The sale will be conducted through a court-supervised process under Section 363 of the U.S. Bankruptcy Code, which will provide potential buyers the opportunity to submit offers and is expected to conclude in June 2024.

Ron Cohen, M.D., Acorda’s CEO and President, said, "Acorda’s management team and board have evaluated all of our strategic options, and following an exhaustive process believe that this option 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. We are confident that Merz Therapeutics, if they are the ultimate acquirer, will be able to seamlessly continue serving these patients’ needs, given Merz’s longstanding dedication to improving the lives of people who suffer from movement disorders and other neurological conditions."

Acorda will continue operations while it works to complete the sale process. To enable this, the Company has filed motions with the court seeking to ensure the continuation of normal operations during this process. Upon court approval, Acorda expects to minimize the impact of the bankruptcy process on its employees, customers, patients, and other key stakeholders.

Acorda entered into a Restructuring Support Agreement with the holders of over 90% of its 6.00% Convertible Senior Secured Notes due 2024, which sets out certain milestones and conditions relating to the Section 363 sale process. In addition, in order to fund the continued operations of the Company during the bankruptcy process, Acorda and certain noteholders entered into a Debtor-in-Possession Financing Agreement to provide a term loan facility in the aggregate amount of $20 million in new money, which is also subject to court approval.

Acorda is being advised by Baker McKenzie as legal counsel, Ernst & Young as financial advisor, and Ducera Partners and Leerink Partners as the investment bankers. Merz is being advised by Freshfields Bruckhaus Deringer US LLP as legal counsel, Morgan Stanley as investment banker, and Deloitte as financial and tax advisors. Senior Convertible Noteholders are being advised by King & Spalding as legal counsel and Perella Weinberg Partners as investment banker.

Additional Information

Additional information about the bankruptcy cases is available by calling the Company's Restructuring Information Line at (844) 712-1917 within the U.S., or (646) 777-2412 outside the U.S. Information is also available at https://cases.ra.kroll.com/Acorda. Additional information may also be found in our public reports filed with the Securities and Exchange Commission.

About Acorda Therapeutics

Acorda Therapeutics develops therapies to restore function and improve the lives of people with neurological disorders. INBRIJA^® is approved for intermittent treatment of OFF episodes in adults with Parkinson’s disease treated with carbidopa/levodopa. INBRIJA is not to be used by patients who take or have taken a nonselective monoamine oxidase inhibitor such as phenelzine or tranylcypromine within the last two weeks. INBRIJA utilizes Acorda’s innovative ARCUS^® pulmonary delivery system, a technology platform designed to deliver medication through inhalation. Acorda also markets the branded AMPYRA^® (dalfampridine) Extended Release Tablets, 10 mg.

Forward-Looking Statements

This press release includes forward-looking statements. All statements, other than statements of historical facts, regarding management's expectations, beliefs, goals, plans or prospects should be considered forward-looking. These statements are subject to risks and uncertainties that could cause actual results to differ materially, including: our ability to negotiate and confirm a sale of substantially all of our assets under Section 363 of the Bankruptcy Code (or any other plan of reorganization); the high costs and related fees of cases instituted under the Bankruptcy Code; our ability to obtain sufficient financing to allow us to operate our business during the course of the Chapter 11 proceedings; our ability to satisfy the conditions and milestones in the Restructuring Support Agreement; our ability to maintain our relationships with our suppliers, service providers, customers, employees and other third parties; our ability to maintain contracts that are critical to our operations; our ability to execute competitive contracts with third parties; the ability of third parties to seek and obtain court approval to terminate contracts and other agreements with us; our ability to retain our current management team and to attract, motivate and retain key employees; the ability of third parties to seek and obtain court approval to convert the Chapter 11 proceedings to a proceeding under Chapter 7 of the Bankruptcy Code; the actions and decisions of our shareholders, creditors and other third parties who have interests in the Chapter 11 proceedings that may be inconsistent with our plans; our ability to successfully market INBRIJA, AMPYRA, FAMPYRA or any other products that we may develop; our ability to attract and retain key management and other personnel, or maintain access to expert advisors; our ability to raise additional funds to finance our operations, repay outstanding indebtedness or satisfy other obligations, and our ability to control our costs or reduce planned expenditures and take other actions which are necessary for us to continue as a going concern; risks related to the successful implementation of our business plan, including the accuracy of our key assumptions; risks related to our corporate restructurings, including our ability to outsource certain operations, realize expected cost savings and maintain the workforce needed for continued operations; risks associated with complex, regulated manufacturing processes for pharmaceuticals, which could affect whether we have sufficient commercial supply of INBRIJA, AMPYRA or FAMPYRA to meet market demand; our reliance on third-party manufacturers for the production of commercial supplies of INBRIJA, AMPYRA and FAMPYRA; third-party payers (including governmental agencies) may not reimburse for the use of INBRIJA, AMPYRA or FAMPYRA at acceptable rates or at all and may impose restrictive prior authorization requirements that limit or block prescriptions; reliance on collaborators and distributors to commercialize INBRIJA and FAMPYRA outside the U.S.; our ability to satisfy our obligations to distributors and collaboration partners outside the U.S. relating to commercialization and supply of INBRIJA and FAMPYRA; competition for INBRIJA and AMPYRA, including increasing competition and accompanying loss of revenues in the U.S. from generic versions of AMPYRA (dalfampridine) following our loss of patent exclusivity; competition from generic versions of FAMPYRA (dalfampridine) following patent challenges in jurisdictions outside of the U.S.; the ability to realize the benefits anticipated from acquisitions because, among other reasons, acquired development programs are generally subject to all the risks inherent in the drug development process and our knowledge of the risks specifically relevant to acquired programs generally improves over time; the risk of unfavorable results from future studies of INBRIJA (levodopa inhalation powder) or from other research and development programs, or any other acquired or in-licensed programs; the occurrence of adverse safety events with our products; the outcome (by judgment or settlement) and costs of legal, administrative or regulatory proceedings, investigations or inspections, including, without limitation, collective, representative or class-action litigation; failure to protect our intellectual property, to defend against the intellectual property claims of others or to obtain third-party intellectual property licenses needed for the commercialization of our products; and failure to comply with regulatory requirements could result in adverse action by regulatory agencies.

These and other risks are described in greater detail in our filings with the Securities and Exchange Commission. We may not actually achieve the goals or plans described in our forward-looking statements, and investors should not place undue reliance on these statements. Forward-looking statements made in this press release are made only as of the date hereof, and we disclaim any intent or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release, except as may be required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240401939079/en/

Acorda Therapeutics

Tierney Saccavino

tsaccavino@acorda.com

Source: Acorda Therapeutics

FAQ

What is Acorda Therapeutics, Inc. filing for?

Acorda Therapeutics, Inc. is filing for voluntary Chapter 11 protection to facilitate the sale of its assets.

Who is acquiring Acorda's assets?

Merz Therapeutics is acquiring Acorda's assets for $185 million.

What are the rights included in the asset purchase agreement?

The rights to INBRIJA, AMPYRA, and FAMPYRA are included in the asset purchase agreement.

What is the expected completion timeline for the sale process?

The sale process is expected to conclude in June 2024.

How will patient access to INBRIJA and AMPYRA be affected?

Patient access to INBRIJA and AMPYRA will continue uninterrupted during the sale process.