Risk & Compliance

Investor: Sell the Company

One investor leans on the board of Acorda Therapeutics to sell the company in the wake of successful drug study results.
Marie LeoneFebruary 23, 2007

Third Point LLC, a shareholder of Acorda Therapeutics, is flexing its muscle, pushing the board of directors to sell the company — or else. In a letter to Acorda CEO Ron Cohen, which was included in a regulatory filing, Third Point CEO Daniel Loeb strongly suggested that the board hire an investment bank to start exploring the sale of the drug developer.

In his letter, Loeb said that if the board was not responsive to Third Point’s request, “we will explore alternatives for exerting greater control of the [c]ompany,” implying a possible takeover. Third Point, which owns 9.9 percent of Acorda, could not immediately be reached for comment.

Acorda spokesperson Tierney Saccavino said the company was not commenting on the Third Point shareholder resolution at this time.

In his letter, Loeb said the sale of the company is necessary to better market an Acorda drug called Fampridine-SR, which is used to treat multiple sclerosis. He asserted that Fampridine “would have the greatest value in the hands of a seasoned worldwide multiple sclerosis drug developer and marketer,” adding that a larger and more experienced company would be able to move the drug through the government-regulation process and into the hands of patients more quickly than Acorda.

Acorda recently announced that it would market Fampridine with a partner in Europe, but was planning to go it alone in the United States, noted Loeb. “Indeed, a European partnership would be a serious mistake, as it would drastically impair if not eliminate the level of interest from potential acquires,” he wrote.

According to Loeb, after Acorda announced successful Fampridine study results on September 25, 2006, the company’s share price rose from its level of $2.22 on September 22 to $22.61 on February 21, 2007. Shares closed at $22.55 on Thursday. “Based on our analysis, we believe that there would be several potential interested buyers and that the acquisition price would be significantly in excess of the current market value,” he added.

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