ANAHEIM, Calif., April 26, 2011 /PRNewswire/ -- Questcor Pharmaceuticals, Inc. (NASDAQ: QCOR) today reported financial results for its first quarter ended March 31, 2011. Net sales totaled a record $36.8 million for the quarter compared to $26.2 million for the quarter ended March 31, 2010, and $29.3 million for the quarter ended December 31, 2010.
The Company's financial performance was driven by a 120% year-over-year increase in the number of new paid prescriptions of H.P. Acthar® Gel (Acthar) for the treatment of multiple sclerosis (MS) exacerbations. In the first quarter, paid Acthar prescriptions for the treatment of nephrotic syndrome (NS) increased to 18 while prescriptions for the treatment of infantile spasms (IS) were 89, which is within the historic range for IS.
"Our strategy to expand the sales force is clearly paying off," said Don M. Bailey, President and CEO of Questcor. "Paid MS prescriptions are up sharply from last quarter. March was a particularly strong month and this momentum has continued so far in April. We believe that Acthar is filling an increasingly important role in the treatment of exacerbations associated with MS and, looking forward, we expect to continue to grow sales in this important therapeutic area."
Mr. Bailey added, "We are also encouraged by the early positive results from our small, dedicated nephrology sales team, which initiated selling efforts at the beginning of March. The number of nephrologists who are using Acthar to treat patients with nephrotic syndrome is increasing. In addition, during the second quarter we will initiate a company-sponsored Phase IV trial to study Acthar in the treatment of NS associated with idiopathic membranous nephropathy. Acthar is indicated 'to induce a diuresis or a remission of proteinuria in the nephrotic syndrome without uremia of the idiopathic type or that due to lupus erythematosus'."
Non-GAAP and GAAP Net Income
Non-GAAP net income for the quarter ended March 31, 2011 was $12.8 million, or $0.20 per diluted common share. Non-GAAP net income for the quarter ended March 31, 2010 was $8.6 million, or $0.14 per diluted common share.
On a GAAP basis, net income for the first quarter of 2011 was $11.2 million or $0.17 per diluted common share. Net income for the first quarter of 2010 was $7.9 million, or $0.12 per diluted common share.
The Company believes it is important to share these non-GAAP financial measures with shareholders as they represent the ongoing economics of the business and reflect how we manage the business. Accordingly, management believes investors' understanding of the Company's financial performance is enhanced as a result of our disclosing these non-GAAP financial measures. Non-GAAP net income should not be viewed in isolation, or as a substitute for, or as superior to, reported GAAP net income. The reconciliation between GAAP and non-GAAP net income is provided with the financial tables included with this release.
Prescription Trend Information for MS, NS and IS
During the first quarter of 2011, Questcor shipped 2,010 vials of Acthar compared to 1,446 vials in the first quarter of 2010. The Company's quarterly vial shipments continue to be subject to significant variation due to the size and timing of individual orders from our distributor, and the timing of these orders can significantly affect net sales and net income in any particular quarter. For this reason, as well as other factors causing quarter-to-quarter variability in Questcor's operating results, the Company believes that investors should consider the Company's results over several quarters when analyzing the Company's performance.
Because Acthar prescriptions are filled at specialty pharmacies, the Company does not receive complete information regarding either the number of prescriptions or the number of vials by therapeutic area for all of the patients being treated with Acthar. However, Questcor is able to monitor trends in payer mix and areas of therapeutic use for new Acthar prescriptions based on data it receives from its reimbursement support center. Questcor estimates that over 90% of new Acthar prescriptions are processed by this support center, but believes that very few refill prescriptions are processed there.
In order to help investors better understand historical trends in sales of Acthar for each of its three key therapeutic uses, acute exacerbations of MS, NS, and IS, Questcor has grouped new prescriptions processed by its reimbursement center into two groups -- "Paid" and "Fully Rebated." "Paid" prescriptions include those prescriptions for which Questcor retains the full selling price for Acthar, as well as Tricare prescriptions that receive a 24% rebate. "Fully Rebated" prescriptions are those for which Questcor can identify that it has recorded a rebate liability approximately equal to or, for periods prior to the first quarter of 2010, greater than the price charged to its distributor. From time to time during the past two years, the rebate liability for some government insurance programs has shifted between these two categories. Therefore, the prescriptions that fall into the "Paid" and "Fully Rebated" categories have also shifted over time as follows:
"Paid" prescriptions (Rxs) include all prescriptions in the following payer categories:
- Commercial--For all time periods.
- Tricare--For 2008, 2010 and 2011, but not 2009.
- Medicaid Managed Care--For all time periods through March 22, 2010 (see Note 1 below the tables).
"Fully Rebated" prescriptions (Rxs) include:
- Those reimbursed by fee-for-service Medicaid insurance and other state programs eligible for full rebates as Medicaid Waivers Programs for all time periods.
- Tricare--For 2009.
- Medicaid Managed Care--For all time periods beginning March 23, 2010 (see Note 1 below the tables).
The following tables show, for each of the three key Acthar therapeutic uses, the number of new prescriptions shipped grouped into "Paid" and "Fully Rebated":
Multiple Sclerosis (and related conditions) New Rxs
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Growth in Paid Rx