Acorda Therapeutics is reducing its staff count by 15% effective immediately as it struggles to bring operating costs down and hit expected revenue.
New York-based Acorda Therapeutics, which develops treatments for neurological disorders, is reducing its staff count by 15% effective immediately as it struggles to bring operating costs down and hit expected revenue.
The corporate restructuring effort translates to a cost savings of around $20 million per year, starting in 2022. The company also estimates that it will incur some $3 million in pre-tax charges for severance payments to laid-off employees, plus other restructuring costs, in the first quarter of 2022.
As part of this major change, Acorda appointed current chief commercial officer Lauren Sabella to chief operating officer. Sabella will be responsible for several departments, including business operations, quality, information technology and technical operations. Her role will be filled by Kerry Clem, who is serving as the firm’s executive vice president of sales, market access and operations.
The decision comes shortly after Acorda announced a GAAP net loss of $22.9 million in the second quarter to June 30, 2021, from a net loss of $17.4 million for the same period in 2020. While the company reported a net revenue of $6.4 million (from $4.7 million previously), it also posted an increase in operating expenses across various units. Research and development expenses were logged at $2.4 million, while sales, general and administrative expenses figured at $32.4 million. For the full year of 2021, Acorda expects net revenue to hit $75 million to $85 million.
The company recently signed a deal with Esteve Pharmaceuticals to commercialize INBRIJA in Spain, providing people with Parkinson’s disease greater access to targeted medications. It is also looking to secure more partnerships in Europe and globally.
INBRIJA is a U.S. Food and Drug Administration-approved prescription drug used for OFF episodes in adults who have been diagnosed with Parkinson’s and receiving regular carbidopa and levodopa.
“We have made substantial progress over the past year, growing sales of Inbrija, maintaining Ampyra revenue to a substantial degree, and retiring our short-term debt. We have achieved these outcomes despite the significant impact of the pandemic on our business. When the pandemic subsides, we believe that we will have the opportunity to accelerate Inbrija’s trajectory, as in-person interactions with health care providers and patients return to more normal levels. The headcount reductions and structural changes we have made will enable us to operate more efficiently and further align our expenses with revenue, while continuing to grow Inbrija sales,” said Ron Cohen, M.D., the president and chief executive officer of Acorda, in a statement.
“We are deeply grateful to the associates who are leaving Acorda for their commitment, hard work and many contributions,” added Cohen.
This is not the first time that Acorda has laid off a chunk of its headcount. In 2019, the company terminated 25 percent of its employees as part of a corporate restructuring effort.
As of this writing, no details were shared on the severances offered to the 15% of its staff who are leaving, nor of any other plans for the remaining employees.
