Questcor Pharmaceuticals Inc. (NASDAQ: QCOR)

Questcor Pharmaceuticals Inc. (QCOR) markets H.P. Acthar Gel (repository corticotropin injection), an injectable drug that is approved for the treatment of certain disorders with an inflammatory component, including the treatment of exacerbations associated with multiple sclerosis (MS), and the treatment of nephrotic syndrome. H.P. Acthar Gel (Acthar) is not indicated for, but is also used in treating patients with infantile spasms (IS). The Company also markets Doral (quazepam), which is indicated for the treatment of insomnia characterized by difficulty in falling asleep, frequent nocturnal awakenings, and/or early morning awakenings. As of December 31, 2008, Acthar was approved in the United States for the treatment of exacerbations associated with MS, nephrotic syndrome and many other conditions with an inflammatory component.

Questcor Pharmaceuticals Inc. was founded in 1990 and is headquartered in Union City, California.

Source: Reuters.com, SEC Filings.

Financial Summary

During the third quarter of 2009, QCOR shipped 1,354 vials of Acthar compared to 1,500 vials in the third quarter of 2008 and 1,564 vials in the second quarter of 2009. As a result of the reduction in vials shipped, gross sales were 10% lower in the third quarter of 2009 compared to the third quarter of 2008. There has been significant variability in prescription activity on a monthly basis in the use of Acthar in the treatment of IS due to the very small IS patient population. For each of the three months in the third quarter of 2009, the monthly usage of Acthar for IS was at the low end of its two-year historic monthly range. It is possible that a portion of the usage decline was related to a lower national birth rate this year and the greater use of alternative therapies for the treatment of IS.

Net sales totaled $13.9 million for the three months ended September 30, 2009, compared to $24.2 million in the year earlier period. Net income for the third quarter of 2009 was $1.2 million, or $0.02 per diluted common share compared to $9.0 million, or $0.13 per diluted common share in the year earlier period.

Net sales totaled $62.4 million for the nine months ended September 30, 2009, compared with $68.2 million for the same period of 2008. Net income applicable to common shareholders for the first nine months of 2009 was $18.2 million, or $0.27 per diluted common share compared with net income applicable to common shareholders of $19.0 million, or $0.26 per diluted common share for the first nine months of 2008.

At October 30, 2009, QCOR’s cash, cash equivalents and short-term investments totaled approximately $71 million, and accounts receivable totaled $11 million.

During the third quarter, the Company did not repurchase any shares of its common stock. Prior repurchase activities have expended $57.1 million for the repurchase of 12 million common and preferred shares since this program began in 2008.

Source: Reuters.com, SEC Filings.

Analyst Consensus

This is the consensus forecast amongst 2 polled investment analysts. Against the Questcor Pharmaceuticals Inc company.

The one analyst offering a 12-month price target expects QCOR share price to rise to 9.00 in the next year from the last price of 4.22.

Source: www.ft.com

Source: http://www.reuters.com/finance/stocks/estimates?symbol=QCOR.W

Investment Highlights

QCOR announced in late October that David Young, Pharm.D., Ph.D., currently a member of QCOR’s board of directors, has been appointed to the newly created position of chief scientific officer, and Sian E. Bigora, Pharm.D. has been appointed to the newly created position of vice president of Regulatory Affairs. Dr. Young (56) joins the Company from AGI Therapeutics plc where he served as executive director and president of U.S. Operations for the specialty pharmaceutical company since 2006. Dr. Bigora also joins QCOR from AGI Therapeutics where she served as vice president of Clinical Research and Regulatory Affairs since 2007. Both executives will be based in the Company’s new East Coast offices in Columbia, Maryland. Dr. Young will resign from QCOR’s board effective on his start date as an employee of the Company.

QCOR announced in mid October that it has resubmitted its filing to the U.S. Food & Drug Administration (FDA) for its supplemental New Drug Application (sNDA) seeking approval to market H.P. Acthar^® Gel (repository corticotrophin injection) for the treatment of infantile spasms. The resubmission follows the FDA’s request in May 2009 for the filing to include additional statistical analysis relating to data from one secondary study within the Company’s filing. Acthar is currently approved in the U.S. for the treatment of MS exacerbations, nephrotic syndrome and many other conditions. Acthar is not approved in the U.S. for the treatment of IS, a potentially life-threatening disorder that typically begins in the first year of life. However, pursuant to guidelines published by the American Academy of Neurology and the Child Neurology Society, many child neurologists use Acthar to treat infants afflicted with this condition. QCOR is currently pursuing FDA approval for Acthar in the treatment of IS. Previously, the FDA granted Orphan Designation to Acthar for the treatment of IS.

Source: http://www.questcor.com/

Technical Analysis

QCOR is below its 50 day moving average. This bearish sign is even more significant because the moving average is also trending lower.

QCOR’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility. Additionally, QCOR is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

QCOR’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below 0, which suggests that the underlying moving averages are bearish.

Comparative Analysis

Source: Thomson Financial

Insider Trading Activity

Source: Yahoo Finance

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