We need to keep in mind how relatively few vials of Acthar need to be shipped, across all indications, for QCOR to be financially successful. This is the underlying strength of the company--a thousand vials here, a thousand vials there, and its all good.
QCOR posted a strong Q4 2012 shipping 6,330 vials.
If they ship 7,100 vials in Q1 2013, it will be a strong quarter, in my opinion.
Not sure I have seen an average vial per prescription calculation across all indications--but for the sake of argument, let's estimate 3.5 vials per script in 2013. 7,100 vials divided by 3.5 vials per script = 2,028 scripts.
Two other things to NOTE are that the margins on these low bar sales are enormous (93% gross margin, 40% net operating margins) AND to boost both TOP AND BOTTOM LINES, Questcor hired well over 100 new reps for their two new growth engines (Nephrotic Syndrome and Rheumatology). If each new rep were to only create one new (average) Rx per month that would = WELL OVER 50% growth by itself...And I can assure you their targets are significantly over 1 Rx per month!!!
Not to mention what was already figured:
Jim...NOTE--The $915,000 is per employee NOT PER REP. PER REP IS CLOSER TO $1.5 MILLION PER YEAR at a 93% Gross Margin and about 40% Net Margin...So incremental revenue will be somewhere between $150 million and $200 million in 2013 (less whatever learning curve delay may be in Q1 with minor in Q2). That's a net increase to EPS of at least $1.00 per share (already net of taxes) PLUS the 80 cents EPS increment from Feds (Merrill Lynch's estimate on this). Easy $6.00 EPS in 2013 and I'm sticking with my bottom up EPS estimate of $6.79. NOTE--Analyst consensus for next 5 years growth rate is 33%
ONLY QUESTION REMAINING is where will the P/E (PEG) head. Using the forward growth estimate it should be 30-35X . $6.00 x 30=$180 $6.00 x 35=$210 and $6.00 x 20 (VERY CONSERVATIVE INDUSTRY AVERAGE P/E)= $120 share price !!! Less
The $100 PLUS over the next year is just such a total no-brainer!!! I continue to marvel at how the shorts believe that their game of musical chairs won't end when with each incremental performance measure (earnings, revenues, new studies, new indication successes, 100++ new reps and on and on and on, there are one or two less chairs. I know that my $150 price target is extreme by other measures, but NOT BY THE FUNDAMENTALS. And whether it's $100, $125, $150 or more in the next year (or perhaps a little longer), Questcor's stock price only has one direction in front of it and it is an aggressive trip to the NORTHEAST !!!