Obviously IF there were some harsh judgment against Questcor it would affect the PPS adversely. But it is highly unlikely that the infractions amount to much. And those other district court cases had a number of major pharma companies and some of their offenses were egregious. Since this District Court is not in Questcor's HQ domain it is most probable that the incidence(s), IF ANY, were isolated to a single rep who got a little to aggressive in their marketing practices. As such, IF they were to prosecute (highly unlikely) the judgment would be a slap on the wrist at worst. More than likely as any offense(s) become more transparent, Questcor would probably figure out a plea arrangement (LESS THAN THAT SLAP ON THE WRIST) to make it go away.
Since none of us on the outside actually know what this is about we can only speculate about potential consequences as I have above. I just personally think that it is much ado about nothing AND could easily be part of the orchestrated short campaign we've all enjoyed so much since October. As such, it could be a simple as one of the aggressive shorts took some whistle blower type action hoping to cause this stir.
Who knows? Questcor management does and they're doing exactly what any other quality management team would do under these circumstances. Cooperate until they can get it dealt with. Upon any resolution other than one with significant consequences (again highly unlikely) the removal of this issue will have an extremely positive impact on the PPS simply by removing the kind of uncertainty you expressed in your email to me.
TY Max great explanation,
I like to add.
First, It's just an Investigation, no charges have been filed.
Secondly, The charge is most likely related to off label marketing by a single rep as mentioned.
Thirdly that FDA or FTC have been very aggressively pursuing marketing claims. Just recently, a court has dismissed charges against a rep based on his amendment rights claiming that off label marketing by reps support his right to free speech. This, in of itself, eliminates those departments from pursuing any off label marketing claims that are currently pending, unless they appeal the ruling.
Fourth, It has been stated by many analysts that the effect of this investigation on the company if reversed would be accreditation of about $3 a share. Meaning the Analysts expected share price has already taken in account $3 for this investigation.
Lastly, We may never here that the investigation has been terminated. If that is the case then time depreciation of the $3 should take place with no news.
Sentiment: Strong Buy
My two cents:
I'm thinking the investigation is not for off-label selling, given Acthar's broad label, across so many therapeutic areas. My opinion: a rep being too aggressive about first line use, or distribution of unapproved, third-party literature (e.g. a study). I would strongly agree this is going to be a minor infraction, DOJ will make their point and extract their pound of flesh. As I have posted before, the DOJ wants to police, they do not want to penalize companies to the point of serious damage. Even the multi-billion dollar fines that everybody loves to cite--I know of two cases (not multi-billion) where those fines were ultimately negotiated and reduced after the publicity and figurative perp walk and based on "good faith" actions by the offending company.
Jamie--the DOJ will likely not report an end to the investigation, because they will never admit to the investigation unless they bring charges. QCOR will probably report the investigation conclusion in an SEC filing--or not.
Sentiment: Strong Buy
itsawhiz - should QCOR not report it when the investigation is over? They did a filing when the investigation started so i'm expecting them to report when it is done but maybe it doesn't work that way? i have no experience with such investigations.
I've never been worried about the so called investigation in the first place but would like to hear how it ends and hopefully that will be soon!
maxdad, well put explanation and pretty much what most of us feel about the issue. I think the feeling is, as you state, it's almost a non-issue or, at most, a minor one. I think we are in for a real joy ride.
Sentiment: Strong Buy