Questcor Pharmaceuticals, Inc. (Headquarters) Reports Second Quarter 2010 Results

UNION CITY, Calif., July 28 /PRNewswire-FirstCall/ -- Questcor Pharmaceuticals, Inc. (Nasdaq: QCOR) today reported financial results for the second quarter ended June 30, 2010. The Company’s financial performance was driven primarily by a 145% year-over-year increase in the number of new paid Acthar prescriptions for the treatment of multiple sclerosis (MS) exacerbations as compared to the second quarter of 2009.

Net sales totaled a record $28.3 million for the quarter ended June 30, 2010 compared to $25.3 million for the quarter ended June 30, 2009, and $26.2 million for the quarter ended March 31, 2010. Net income for the second quarter of 2010 was $9.3 million, or $0.14 per diluted common share compared to $9.3 million, or $0.14 per diluted common share, for the second quarter of 2009, and $7.9 million, or $0.12 per diluted common share, for the first quarter of 2010.

Operating expenses were $12.0 million, $2.4 million higher in the second quarter of 2010 than in the second quarter of 2009 as a result of efforts to increase net sales and pursue additional clinical indications for Acthar. These efforts include a significantly expanded sales and marketing effort to increase Acthar sales for the treatment of MS, and increased research and development expenses to attempt to identify and support additional indications for Acthar, including the treatment of Nephrotic Syndrome.

“Our decision to expand our sales organization in 2009 led to strong MS prescription growth during the first and second quarters of 2010 as our sales team increased awareness in the medical community of the benefit of Acthar to patients for the treatment of MS exacerbations,” said Don M. Bailey, President and CEO. “The success of our sales outreach over the past year was a major factor behind our recent decision to double the sales organization during the third quarter of 2010. Net sales from Acthar prescriptions for MS exacerbations surpassed that from infantile spasms (IS) earlier this year, and we believe that the MS market will continue to be a growth driver for Questcor.

“At the same time, paid prescriptions for IS treatment remained in the middle of its historic sales range. Importantly, we completed a very successful FDA panel hearing in May. With the current PDUFA date set for September 11, 2010, we are working with the FDA to finalize labeling, REMS and other post-approval commitments in support of an approval for the IS indication,” added Mr. Bailey.

Net sales totaled $54.6 million for the six months ended June 30, 2010, compared with $48.6 million for the same period of 2009. Net income for the first six months of 2010 was $17.1 million, or $0.27 per diluted common share compared with $17.0 million, or $0.25 per diluted common share, for the first six months of 2009.

MS, IS and NS Sales

During the second quarter of 2010, Questcor shipped 1,680 vials of Acthar compared to 1,564 vials for the second quarter of 2009. 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 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 that very few refill prescriptions are processed there.

In order to help investors better understand the trends in sales of Acthar for each of its three key therapeutic uses (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 a relatively small number of Tricare prescriptions which receive a 24% rebate. “Fully Rebated” prescriptions are those for which Questcor can identify as having recorded a rebate liability approximately equal to or 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. 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:

• CommercialFor all time periods.
• TricareFor 2008 and 2010.
• Medicaid Managed CareFor 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 CareFor 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":