Analyst Touches on Read Through from Dismissal of Acorda (ACOR) IPR (BIIB) (CELG)

Acorda Therapeutics (NASDAQ: ACOR) gained late on Monday after it was learned that the USPTO Patent Trials and Appeal Board will not institute the inter partes review of its 685 patent and 826 patent.

In the view of analyst Michael J. Yee of RBC Capital, shares of Acorda could trade back to the high $30s. He also commented briefly on possible read though for Biogen (NASDAQ: BIIB) and Celgene (NASDAQ: CELG).

Yee explained, "This is a positive surprise versus consensus as 60-70% of IPRs get accepted for review and street was concerned this would get taken up and looked at further. We expect ACOR could trade back towards the higher $30s where it was before the IPR although we know bulls and bears will continue to debate ACOR stock although we believe this is fundamentally a positive today."

"While we don't want to read through too much that one denial for review is a positive for the rest of the other IPRs on file (eg against CELG and BIIB in biotech) the Street could view this as a positive derivative and give less credit to the other ones filed by similar anti-patent groups. Also it does remove some recent overhang and suggests that biopharma IPRs may not be as easy as others," continued the analyst.

Yee added, "The court ruled that on the 826 and 685 patents that two posters presented did not constitute prior art and displaying these at medical conferences is not a wide enough audience or enough broad distribution to be considered prior art. Since the board maintains the claims, then the IPR challengers are estopped from challenging the same claims in other litigations. At the same time, this raises the validity of the inventor's (ACOR) claims."

RBC has an Outperform rating on Acorda with a price target of $45.

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