Letter from the CEO

Acorda’s Leadership Team, Board of Directors, and associates took decisive actions in 2017, and as a result Acorda has emerged in 2018 as a streamlined organization with a strong cash position, focused on the approval and successful US launch of INBRIJA.

2017–Challenges and a Major Milestone

In March, a US district court invalidated four patents, which would have preserved market exclusivity for AMPYRA^® (dalfampridine) into 2025. We strongly disagree with the court’s ruling and are in the process of appealing the decision. We look forward to presenting our case in an oral argument to the appellate court, scheduled for June 7 of this year.

In June, we submitted an NDA for INBRIJA; the FDA responded with a “Refusal to File” (RTF) letter, citing two deficiencies unrelated to data that were readily addressed. We resubmitted the NDA in December 2017 and announced the FDA’s acceptance of the filing on February 20; the PDUFA target action date is October 5, 2018. We also filed an MAA with the European Medicines Agency in March 2018. We plan to seek a partner for the commercialization of INBRIJA in ex-US territories.

In November, we announced the discontinuation of the tozadenant development program due to the emergence of the serious adverse event agranulocytosis and associated serious adverse events. At the time of the discontinuation, over 90% of the participants had completed the study and we plan to present those data in future medical and scientific venues.

In the first quarter, we reported a major milestone—positive results from our INBRIJA Phase 3 efficacy and long-term safety studies. The efficacy study met its primary endpoint, a statistically significant improvement in motor function compared to placebo. The data from the long-term safety study in people with Parkinson’s showed no differences in pulmonary function between the group receiving INBRIJA and an observational control group. Cough was the most frequently reported adverse event in both studies and was generally reported as mild.

We presented the full Phase 3 efficacy and interim long-term safety data sets in June 2017 at the annual International Congress of Parkinson's Disease and Movement Disorders, both during the scientific sessions and at an investor webinar during the conference. These presentations were enthusiastically received by both healthcare professionals and investors. We were also assigned four platform presentations for our submissions on INBRIJA data at the American Academy of Neurology (AAN) conference on April 24.

Focus on INBRIJA and Value Creation

In response to the challenges of 2017, we implemented a comprehensive corporate restructuring, streamlining the organization and its cost structure and significantly increasing our cash reserves. In March, immediately after the district court’s ruling on AMPYRA, we substantially reduced headcount and expenses, focusing the company on preparing for the manufacture, launch, and commercialization of INBRIJA. During the year, we also monetized the sales or royalty streams from several of our smaller commercial products, ZANAFLEX CAPSULES^® (tizanidine HCl), FAMPYRA^® (prolonged-release fampridine tablets), and SELINCRO^® (nalmefene), adding $57 million dollars to our cash balance. We closed 2017 with $307 million and also expect to end 2018 with over $300 million in cash on hand. We are now well-capitalized for the launch of INBRIJA.

INBRIJA–Targeting an Important Unmet Need in Parkinson’s

INBRIJA is an investigational, self-administered, inhaled form of levodopa that relies on the Company’s proprietary ARCUS^® technology; it has been developed to address symptoms of OFF periods in people with Parkinson’s disease, who are on a carbidopa/levodopa-based regimen. OFF periods are times throughout the day when a patient’s oral regimen of levodopa unpredictably wears off, leading to the re-emergence of Parkinson’s symptoms. These OFF periods are considered by patients, care partners, and physicians to be one of the most debilitating and disruptive aspects of the disease. In a 2014 survey of more than 3,000 people with Parkinson’s conducted by the Michael J. Fox Foundation, 64% of respondents reported greater than two hours of OFF time per day.

Both healthcare professionals and people with Parkinson’s consider oral levodopa to be the gold standard of treatment for Parkinson’s, and we have heard consistent enthusiasm for an inhaled form of levodopa to treat OFF periods. Based on our extensive market research and our increased understanding of the Parkinson’s space, we have increased our US peak net sales figure for INBRIJA to greater than $800 million.

An Emerging Leader in the Parkinson’s Community

Over the past two years, we have held a number of advisory boards across a wide range of audiences. In September, Acorda convened a multi-disciplinary advisory board meeting that included the “four pillars” of the Parkinson’s community: healthcare professionals, people with Parkinson’s, care partners, and advocacy groups. Our “Live Well. Do Tell.” initiative is the result of that meeting; its goal is to encourage productive conversations about Parkinson’s symptoms among those living with the condition, their families, care partners, and healthcare professionals. Our Facebook page, “The Many Faces of OFF”, is the most successful industry-sponsored page in the Parkinson’s space, with over 87,000 “likes” and over 250,000 video views since it was launched in late 2016.

Leading Specialty Sales and Marketing Organization

Since the launch of AMPYRA, Acorda has developed one of the most effective specialty sales teams in the US. Our current sales force is appropriately scaled to address movement disorder specialists throughout the US. Our customer service hub for AMPYRA allows us to address patient issues with prescription fulfillment and insurance coverage and to monitor compliance. There also are considerable parallels between AMPYRA and INBRIJA—both are therapies that address a symptom of a disease that is not well understood or articulated by healthcare professionals or patients. AMPYRA was the top specialty drug launch of 2010 and achieved 50% target market penetration in five years; we believe that our successful neurology commercial experience and infrastructure provide a solid foundation for the successful launch of INBRIJA.

Arcus

Our proprietary ARCUS drug delivery technology emerged from the laboratory of Dr. Robert S. Langer, and was developed in collaboration with the Massachusetts Institute of Technology. We believe it will be an important platform for the future growth of Acorda. Currently, we are working on an inhaled product for rapid relief of migraine, and also are working with the Bill & Melinda Gates Foundation to develop a dry powder version of lung surfactant, a treatment for neonatal respiratory distress syndrome. While the surfactant program is not aimed at developing a commercial product, our work here will be helpful in adapting ARCUS in developing additional commercial pediatric uses; we are currently evaluating several potential applications.

Summary

Challenges are inevitable in drug development, in which about 90% of drugs that go into human clinical trials ultimately fail. We clustered a number of these challenges in 2017, at the same time achieving major successes in the INBRIJA development program. We have learned from our setbacks, and Acorda has emerged as a more focused, efficient, and high-performing organization—one that is poised to make INBRIJA an important drug launch in the Parkinson’s space.

We anticipate the following key milestones in the next 12 months:

• INBRIJA: Approval and commercialization
• AMPYRA: Oral argument and decision for appeal of district court decision

On behalf of our Leadership Team, Board of Directors, and our associates, thank you, our shareholders, for your continued support. We look forward to delivering on Acorda’s opportunities for building substantial value in 2018 and beyond.

Ron Cohen, M.D.
President and CEO