Questcor Pharmaceuticals, Inc. (Headquarters) Announces Preliminary Operating Metrics for First Quarter 2011

ANAHEIM, Calif., April 4, 2011 /PRNewswire/ -- Questcor Pharmaceuticals, Inc. (NASDAQ: QCOR) today announced preliminary operating metrics for its first quarter ended March 31, 2011. The Company announced the preliminary metrics in advance of the Needham Healthcare Conference, where Don M. Bailey, President and Chief Executive Officer of Questcor, will present on Tuesday, April 5, 2011, at 8:00 a.m. ET. To listen to the audio web cast of the presentation during or after the event, please visit www.questcor.com. The replay will be available for 90 days after the event.

For the quarter ended March 31, 2011, the Company provided the following preliminary key operating metrics:

New, paid prescriptions of H.P. Acthar® Gel (Acthar) for the treatment of exacerbations of multiple sclerosis (MS) during the quarter were greater than 500, up over 115% from the year ago period and up over 40% from the prior quarter.

New, paid prescriptions for infantile spasms (IS) were estimated at 88.

New, paid prescriptions for nephrotic syndrome (NS) were estimated at 18.

2,010 vials of the Company’s principal drug, Acthar, were shipped during the quarter ended March 31, 2011.

Gross sales were $48.6 million.

Based on invoices received from state Medicaid agencies to date, Medicaid and other sales reserves for all periods through December 31, 2010 continue to appear to be adequate. Preliminary analysis of Medicaid prescription activity for the first quarter of 2011 would indicate that sales reserves for the first quarter of 2011 will be about at average percentage levels compared to the three quarters following the March 23, 2010 adoption of healthcare reform.

Operating expenses are estimated to be between $16 million and $18 million.

During the first quarter, the Company used $11.5 million to repurchase 884,300 shares of its common stock in open market transactions. These repurchases brought the total expenditures for the repurchase of common and preferred shares to over $78 million since this effort began in 2008. As of March 31, 2011, Questcor had 61.7 million shares of common stock outstanding, with 4.3 million shares remaining under its common stock repurchase program.

As of March 31, 2011, Questcor’s cash, cash equivalents and short-term investments totaled $122 million.

Questcor currently expects to release its financial results for the first quarter on April 26, 2011.

“The strong performance we saw late in the fourth quarter of 2010 has continued in the first quarter of 2011 and was driven by the increasing productivity of our recently expanded Acthar sales force. March showed significant growth in MS prescriptions and exceeded February’s record performance by over 50%. In addition, we are pleased with the very early results from the efforts of our small dedicated Nephrology sales team. While we are very encouraged by the first quarter new prescription results, we note that prior sharp increases in sequential quarterly Acthar prescriptions have usually been followed by more modest sequential growth,” said Don M. Bailey, President and CEO of Questcor Pharmaceuticals.

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 financial performance. All of the financial and prescription information above are based on preliminary estimates and analysis and are subject to change as the Company continues to close the quarter and conduct its normal financial reviews.

Prescription Trend Information for MS, IS and NS

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, IS, and NS, 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 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":