ANAHEIM, Calif., April 24, 2012 /PRNewswire/ -- Questcor Pharmaceuticals, Inc. (Nasdaq: QCOR) today reported financial results for the first quarter ended March 31, 2012. Net sales for the first quarter were $96.0 million, reflecting expanded physician usage of H.P. Acthar® Gel (Acthar) for treating serious, difficult-to- treat medical conditions. Net sales in the first quarter 2011 were $36.8 million.
GAAP net income for the first quarter of 2012 was $38.5 million or $0.58 per diluted common share. GAAP net income for the first quarter of 2011 was $11.2 million, or $0.17 per diluted common share. Non-GAAP net income for the quarter ended March 31, 2012 was $40.6 million or $0.61 per diluted common share excluding non-cash share-based compensation, depreciation and amortization expense and tax adjustments. Non-GAAP net income for the year ago quarter was $12.8 million, or $0.20 per diluted common share. Questcor repurchased 798,285 shares of its common stock during the first quarter 2012, at an average price of $36.31 per share.
During the first quarter of 2012, Questcor shipped 4,111 vials of Acthar, compared to 2,010 vials in the year ago quarter. The Company's quarterly vial shipments continue to be subject to significant variation due to the size and timing of individual orders received from Questcor's distributor. The timing of when these orders are received and filled can significantly affect net sales and net income in any particular quarter. For example, on the last day of the first quarter of 2012, Questcor filled an order for 180 vials. This shipment favorably impacted net sales by approximately $4 million and earnings per share by approximately four cents for the period. Due to this final order in the quarter, first quarter-ending channel inventory appears to be higher than the level at the end of the fourth quarter of 2011, and higher than the range of channel inventory over the past several quarters. The Company believes that investors should consider the Company's results over several quarters when analyzing the Company's performance.
Acthar Label Information
The product label for Acthar includes 19 FDA-approved indications. Substantially all of the Company's net sales currently result from Acthar prescriptions for the on-label indications of:
- Nephrotic Syndrome (NS): "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." NS can result from several underlying conditions, and prescribing physicians indicate that Acthar is most commonly being prescribed for patients who suffer from NS due to idiopathic membranous nephropathy, focal segmental glomerulosclerosis (FSGS), IgA nephropathy, minimal change disease and lupus nephritis.
- Multiple Sclerosis (MS): "for the treatment of acute exacerbations of multiple sclerosis in adults. Clinical controlled trials have shown H.P. Acthar Gel to be effective in speeding the resolution of acute exacerbations of multiple sclerosis. However, there is no evidence that it affects the ultimate outcome or natural history of the disease." When Acthar is used, it is typically prescribed as second line treatment for patients with MS exacerbations.
- Infantile Spasms (IS): "as monotherapy for the treatment of infantile spasms in infants and children under 2 years of age."
Questcor expects to initiate a commercial effort in rheumatology in late 2012, since Acthar is approved for the following rheumatology-related conditions:
- Collagen Diseases: "during an exacerbation or as maintenance therapy in selected cases of: systemic lupus erythematosus, systemic dermatomyositis (polymyositis)."
- Rheumatic Disorders: "as adjunctive therapy for short-term administration (to tide the patient over an acute episode or exacerbation) in: Psoriatic arthritis, Rheumatoid arthritis, including juvenile rheumatoid arthritis (selected cases may require low-dose maintenance therapy), Ankylosing spondylitis."
"While our substantial NS commercial effort only began in the fourth quarter of 2011, the value of NS shipped prescriptions now exceeds that of MS," said Don M. Bailey, President and CEO of Questcor. "This faster-than-expected NS growth drove us to further expand the NS commercial effort prior to the additional expansion of our MS commercial team. At the same time, we continue to increase our investment in efforts to learn about the possible therapeutic applications of Acthar in other inflammatory and autoimmune diseases as well as increase investments in our management systems, internal control, and compliance infrastructure."
"The expansion of our Nephrology Sales Force from 28 to 58 representatives will be completed by early June, well ahead of our original schedule," noted Steve Cartt, Chief Operating Officer. "In addition, we are also planning to add approximately 30 more representatives to our Neurology Sales Force, with hiring and training expected to be completed sometime in August. We believe these expansions will enable us to further broaden physician awareness of Acthar and its appropriate role in the treatment of both MS relapses and NS. Furthermore, we remain on track to initiate a pilot commercial effort in rheumatology by the end of this year."
"We have been expanding our scientific efforts and R&D investments in Acthar, and expect that we will continue to increase spending to support Questcor's future growth," commented Dr. David Young, Chief Scientific Officer. "Currently, we are funding more than 40 pre-clinical or clinical studies and we have increased our investigation into better understanding how Acthar works and its other potential applications."
Shipped Acthar Vial and Prescription Trend Information
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 an effort to help investors better understand historical trends in the prescriptions written for Acthar within each of its current three key therapeutic areas, NS, MS, and IS, Questcor is providing quarterly prescription information for the time period January 1 2010 through March 31, 2012. We grouped prescriptions processed by its reimbursement center into two groups -- "Paid" and "Fully Rebated."
"Paid" prescriptions (Rxs) include all prescriptions in the following payer categories:
- Commercial
- Tricare--Questcor has a per vial rebate obligation of approximately $8,500 in 2012 and approximately 25% of the price of Acthar for 2010 and 2011.
- Medicaid Managed Care--For Q1 2010 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.
- 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":
