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Acorda Therapeutics, a Pearl River-based biotechnology company, is up for sale after filing for bankruptcy Monday, according to court documents.
Acorda develops therapies for patients with neurological disorders including Parkinson’s disease and multiple sclerosis and filed for bankruptcy because of falling medication sales, the documents show. As part of the proceedings, Acorda has entered an agreement to be sold to German pharmaceutical firm Merz Therapeutics for about $185 million, should no other firm outbid it.
Additionally, Acorda began the process of laying off 97 people on Wednesday, according to a notice filed with the state Department of Labor Tuesday. Layoffs will go until June 15; it is unclear whether any of the Acorda employees that are being terminated will move to the company that buys the biotech firm.
Since it began managing the production and distribution of Ampyra, a medication that treats multiple sclerosis, Acorda has been dependent on the medication’s sales for the majority of its revenue, the court documents said. The medicine brought in $64 million in 2023 in the U.S., but Acorda has seen a “significant decline” in revenue in 2018 because of competition from generic versions of the treatment and expects sales to fall further. According to Acorda, the combination of tumbling revenues and the cost of doing business have caused the firm to accumulate a $1.2 billion deficit, including a $253 million loss in 2023, and file for bankruptcy after a “lengthy strategic review.”
When Acorda goes up for sale, Merz Therapeutics will act as a “stalking horse” in the competitive bidding process, according to the Pearl River company. Stephen Starr, the founder of the Midtown-based Starr & Starr law firm which specializes in bankruptcy cases, told Crain’s a stalking horse bidder represents a guarantee that a company will be sold for a certain amount unless another firm steps in with a higher offer. Stalking horses are typically used in the aftermath of bankruptcy to drive up competition and get the highest price for the firm, Starr said.
The proceeds of the auction will go to the entities Acorda owes money, Starr said. According to court filings, the firm owes more than $7 million to Catalent, a Boston-based pharmaceutical company that manufactures some of the materials Acorda needs for its medications. Acorda also owes nearly $1.5 million to telecommunications firm Nsight Driven Communications.
Acorda will continue operations during the sale process. Hearings in the bankruptcy case are set to begin today.
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Jacqueline Neber , 2024-04-04 11:33:04
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