Questcor Pharmaceuticals, Inc. (QCOR) Message Board

I am still not sure if the shorts have given up yet. Longs have seen this too often within the past year. I am just saying don't count the 47% out especially after watching them in the past. I noticed low volume trades over this last run and usually with low volume,this price moves toward the positive side. My question is: If they do get their grip back how far can they take it down again from here?

Sentiment: Hold

Share on emailEmailShare on printPrintThe Market's Got This Biotech All Wrong
By Brian Nichols - May 3, 2013 | Tickers: ALXN, QCOR | 0 Comments

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Brian is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Many believed that Q1 earnings would be the start of a larger trend higher that reversed the losses seen in shares of Questcor Pharmaceuticals (NASDAQ: QCOR) over the last year, but were those people ever wrong.

Q1 Earnings

Questcor Pharmaceuticals is trading with losses of 9% immediately following its Q1 earnings report. For the quarter, Questcor grew 41% and posted revenue of $135 million and an EPS of $0.76. The problem is that both numbers were far below the consensus, as revenue missed by $22 million and EPS was short by $0.20.

According to the company, earnings were negatively impacted by several transitional events, including: distribution channel disruptions due to the Medicaid rebate change; the timing of Acthar orders that were received and filled; and the introduction of a new reimbursement support center. The company also saw a reduction in the number of Acthar prescriptions to treat MS exacerbations.

Questcor Thoughts

There are some cases when 41% growth is considered “bad” but it’s not often that this occurs when a biotechnology stock is trading at 9.5 times earnings, with a price/sales of 3.35, and pays an annual yield of 3.25%. In fact, this never happens. Yet Questcor, because of its past growth, has very high expectations. In theory, if a stock drops 40% in less than a year then its expectations are also expected to fall, but not for Questcor -- it continues to trade dirt cheap while those in the analyst community expect growth of 60%.

For those of you who are unfamiliar with Questcor, it is a stock that has fallen drastically due to an investigation into its “practices” and insurance restrictions on its only marketable drug, Acthar. The company has done virtually everything possible to regain sentiment including dividends and buybacks, yet has remained unsuccessful. And while many can somehow rationalize that Questcor is a bad stock or that somehow it trades at a fair value price, I can’t help but to look at the earnings report, ignore the expectations, and see an undervalued stock.

Example of Value

In biotechnology, revenue is not created equally, which means that the market places larger valuations on the revenue and growth of certain companies over others. This can be for various reasons, including Orphan statuses, pipelines, or peak sales potential. However, as I look at Questor’s quarter, I can’t help but to think of Alexion Pharmaceuticals (NASDAQ: ALXN).

Alexion Pharmaceuticals is a $19 billion company with one marketed drug that has returned sales of $1.23 billion over the last 12 months and saw growth of 38.5% during its last quarter. Granted Alexion’s drug does produce higher sales than Questcor’s Acthar, yet in terms of logic, is it more reasonable to suggest that Questcor presents greater upside with its $535 million in sales over the last 12 months and its $1.60 billion market cap or that Alexion presents more upside with its $1.23 billion in sales and its $19 billion market cap?

Now, before you answer the question above, be sure to remember that both companies have one product and that both companies are seeing near equal growth. However, only one company pays a dividend yield over 3% and has a forward P/E ratio of 6.0, and that one company is Questcor Pharmaceuticals.

Hence without painting the picture for you I will allow you to soak in those numbers, think about it, and then explain how in the world is Alexion worth $19 billion if Questcor is only worth $1.75 billion? My opinion, the market has this wrong, there is a clear distinction in value, and Questcor Pharmaceuticals is presenting value with its current market capitalization

Sentiment: Strong Buy

Yawn...

Anyone gong up next stop(pause) ?????maybe 37 twenty something...just for fun...

Sentiment: Strong Buy

I do not know about the rest of you Longs, but doesn't feel GOOD to be on the Right side of the trade for a change?Hey Shorts, EAT MY SHORTS! Ba ha ha ha ha

Sentiment: Strong Buy

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Authors:
Questcor: Results Of Rheumatology Physician Survey Show Strong Uptake Of Acthar
Mar 7 2013, 13:25 | 9 commentsby: LifeSci Advisors | about: QCOR Disclosure: I am long QCOR. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

By Christopher Stern, Ph.D. and Andrew McDonald, Ph.D.

In September 2012, Aetna announced that it would restrict coverage of Questcor Pharmaceuticals' (QCOR) leading product Acthar Gel. Fears that other HMOs and government providers would follow suit pushed the company's stock price into a 55% plunge. To determine whether this precipitous drop was the result of a fundamental change in Acthar Gel reimbursement policy or simply due to the headline effects of the subsequent short attack by Citron Research, LifeSci Advisors conducted a survey of 976 nephrologists and 691 neurologists who belong to our proprietary Expert Network. The results of this survey can be downloaded at no cost here. The responses from 96 physicians, 41 of whom had prescribed Acthar Gel in the past year, predicted that the use of the therapy would actually increase over the next year. These data strongly suggested that Aetna's decision would not have widespread influence on physician prescription decisions and that Questcor fundamentals were strong. It should be noted that since that time, Questcor reported two consecutive quarters of record sales: $140.3MM in 3Q and $160.5MM in 4Q.

3,544 people received this article by email alert
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Get email alerts on QCOR »This article was sent to 256,681 people who get the Investing Ideas newsletter. Get the Investing Ideas newsletter »
We recently conducted a similar survey of rheumatologists to determine how the landscape of Acthar Gel is evolving now that the company has expanded their rheumatology sales force from 12 to 55 representatives. Results can be downloaded for free here. Of the 31 practicing rheumatologists who responded to our survey and had prescribed Acthar Gel in the past 3 months, the average number of prescriptions was 3.7 with a median of 2 patients. These responses map closely to those given by nephrologists and neurologists in our previous survey, which averaged 4.7 with a mean of 1 patient, suggesting that the therapy is used similarly across physician subspecialties where Acthar Gel is approved for use.

We asked rheumatologists for which indications they have prescribed Acthar Gel. The therapy was most commonly prescribed for dermatomyositis/polymyositis (14 patients), systemic lupus erythematosus (10 patients), and rheumatoid arthritis (10 patients).

We asked physicians to describe their reimbursement experience with Acthar Gel. Of the 31 physicians who responded, we classified their comments as positive (9), neutral (11), negative (4) and unsure (8). Only two physicians reported that reimbursement issues were prohibitive to their continued use of the therapy. The reimbursement process was much more benign when following a pre-authorization format or when the physician used the Company's support program. Together these results support the assertion made by the company that reimbursement has been stable and consistent. Hence, we think the headline policy changes are more noise than substantive.

Physicians continue to prescribe Acthar Gel and a majority of responding rheumatologists predict that their use would either stay the same or increase in the future. Respondents reported that they expected to use the therapy to treat an average of 4.8 patients, or a median of 2 patients over the next three months.

The results of this rheumatologist survey affirm findings from our previous nephrologist and neurologist survey. Physicians will continue to use Acthar Gel despite the wave of initial headline negative concerns surrounding policy decision notices. A majority of responding physicians is willing to navigate the reimbursement landscape in order to bring Acthar's benefits to their patients. While we expect pre-authorization prior to Acthar use, the results of our surveys indicate that this is not an impediment to continued physician prescription of Acthar Gel for patients who cannot tolerate steroids and who have no other treatment options. Our survey confirms our previous assertion that Acthar Gel fills an important unmet medical need for patients that are refractory to other therapies, that these physicians and patients are experiencing the benefits of Acthar Gel, and that continued physician use over the foreseeable future should drive Acthar Gel sales.

We believe that as investor concerns dissipate over 2013, Questcor's stock price should recover its losses and reach new highs. Questcor currently trades at $31.39 per share (58.5 MM shares) and as of December 31st the Company had $155MM of cash and cash equivalent (or $2.65 per share in cash), no debt, and an EV of $1.67B. The company reported 4Q12 GAAP diluted EPS of $1.03 (or $4.12 annualized). Ex the cash per share, shares of Questcor are currently trading at a P/E or 7. Compared with the current S&P 500 P/E of 17.5, Questcor is trading at an extreme discount, particularly for a company that has exhibited net sales increases of 31%, 90%, and 133% per year since 2009 (not to mention consistent record quarter over quarter sales and earnings). Based on our survey results, we expect that Questcor will continue to diversify its sales into additional therapeutic areas and will return to a P/E of at least 15 in 2013, a conservative estimate, sending the stock price north of $60/share.


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Symbols:

Authors:
Questcor: Results Of Rheumatology Physician Survey Show Strong Uptake Of Acthar
Mar 7 2013, 13:25 | 9 commentsby: LifeSci Advisors | about: QCOR Disclosure: I am long QCOR. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

By Christopher Stern, Ph.D. and Andrew McDonald, Ph.D.

In September 2012, Aetna announced that it would restrict coverage of Questcor Pharmaceuticals' (QCOR) leading product Acthar Gel. Fears that other HMOs and government providers would follow suit pushed the company's stock price into a 55% plunge. To determine whether this precipitous drop was the result of a fundamental change in Acthar Gel reimbursement policy or simply due to the headline effects of the subsequent short attack by Citron Research, LifeSci Advisors conducted a survey of 976 nephrologists and 691 neurologists who belong to our proprietary Expert Network. The results of this survey can be downloaded at no cost here. The responses from 96 physicians, 41 of whom had prescribed Acthar Gel in the past year, predicted that the use of the therapy would actually increase over the next year. These data strongly suggested that Aetna's decision would not have widespread influence on physician prescription decisions and that Questcor fundamentals were strong. It should be noted that since that time, Questcor reported two consecutive quarters of record sales: $140.3MM in 3Q and $160.5MM in 4Q.

3,544 people received this article by email alert
Add your email to get alerts on QCOR too:
Get email alerts on QCOR »This article was sent to 256,681 people who get the Investing Ideas newsletter. Get the Investing Ideas newsletter »
We recently conducted a similar survey of rheumatologists to determine how the landscape of Acthar Gel is evolving now that the company has expanded their rheumatology sales force from 12 to 55 representatives. Results can be downloaded for free here. Of the 31 practicing rheumatologists who responded to our survey and had prescribed Acthar Gel in the past 3 months, the average number of prescriptions was 3.7 with a median of 2 patients. These responses map closely to those given by nephrologists and neurologists in our previous survey, which averaged 4.7 with a mean of 1 patient, suggesting that the therapy is used similarly across physician subspecialties where Acthar Gel is approved for use.

We asked rheumatologists for which indications they have prescribed Acthar Gel. The therapy was most commonly prescribed for dermatomyositis/polymyositis (14 patients), systemic lupus erythematosus (10 patients), and rheumatoid arthritis (10 patients).

We asked physicians to describe their reimbursement experience with Acthar Gel. Of the 31 physicians who responded, we classified their comments as positive (9), neutral (11), negative (4) and unsure (8). Only two physicians reported that reimbursement issues were prohibitive to their continued use of the therapy. The reimbursement process was much more benign when following a pre-authorization format or when the physician used the Company's support program. Together these results support the assertion made by the company that reimbursement has been stable and consistent. Hence, we think the headline policy changes are more noise than substantive.

Physicians continue to prescribe Acthar Gel and a majority of responding rheumatologists predict that their use would either stay the same or increase in the future. Respondents reported that they expected to use the therapy to treat an average of 4.8 patients, or a median of 2 patients over the next three months.

The results of this rheumatologist survey affirm findings from our previous nephrologist and neurologist survey. Physicians will continue to use Acthar Gel despite the wave of initial headline negative concerns surrounding policy decision notices. A majority of responding physicians is willing to navigate the reimbursement landscape in order to bring Acthar's benefits to their patients. While we expect pre-authorization prior to Acthar use, the results of our surveys indicate that this is not an impediment to continued physician prescription of Acthar Gel for patients who cannot tolerate steroids and who have no other treatment options. Our survey confirms our previous assertion that Acthar Gel fills an important unmet medical need for patients that are refractory to other therapies, that these physicians and patients are experiencing the benefits of Acthar Gel, and that continued physician use over the foreseeable future should drive Acthar Gel sales.

We believe that as investor concerns dissipate over 2013, Questcor's stock price should recover its losses and reach new highs. Questcor currently trades at $31.39 per share (58.5 MM shares) and as of December 31st the Company had $155MM of cash and cash equivalent (or $2.65 per share in cash), no debt, and an EV of $1.67B. The company reported 4Q12 GAAP diluted EPS of $1.03 (or $4.12 annualized). Ex the cash per share, shares of Questcor are currently trading at a P/E or 7. Compared with the current S&P 500 P/E of 17.5, Questcor is trading at an extreme discount, particularly for a company that has exhibited net sales increases of 31%, 90%, and 133% per year since 2009 (not to mention consistent record quarter over quarter sales and earnings). Based on our survey results, we expect that Questcor will continue to diversify its sales into additional therapeutic areas and will return to a P/E of at least 15 in 2013, a conservative estimate, sending the stock price north of $60/share.

Sentiment: Strong Buy