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Why Questcor Pharmaceuticals Jumped

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What: Shares of Questcor Pharmaceuticals (Nasdaq: QCOR  ) jumped as much as 17% today to fresh all-time highs after the company reported upbeat sales of its multiple sclerosis drug Acthar.

So what: The company shipped 1,800 vials of the drug in June, bringing its quarterly total to 4,710. That represents a 15% sequential increase relative to the first quarter. Paid subscriptions also rose to between 400 and 410, up from 339 in April and 365 in May.

Now what: Following up the optimistic figures, Jefferies is increasing its price target from $56 to $60, saying the 1,800 in shipments implies $111 million in sales, notably higher than the $103 million consensus that the market is looking for. The company has repurchased more than 3.7 million shares for $156 million during the quarter and still has about $114.7 million in cash and equivalents. Questcor also noted that its channel inventory was a bit higher than usual in the first quarter, and that level has come back down in the second quarter, a good sign for its actual sell-through with its distributor to specialty pharmacies.

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Read/Post Comments (8) | Recommend This Article (4)

Comments from our Foolish Readers

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  • Report this Comment On July 10, 2012, at 2:16 PM, ravens9111 wrote:

    is there a follow up for why QCOR plunged?

  • Report this Comment On July 10, 2012, at 2:33 PM, 4DogsPA wrote:

    Up 14% yesterday on higher than expected sales and now down 22% and I can't find any news, anywhere. All the usual sources still have this rated as BUY...

    Anyone know what happened?

  • Report this Comment On July 10, 2012, at 2:49 PM, ravens9111 wrote:

    Citron report came out earlier...

  • Report this Comment On July 10, 2012, at 5:29 PM, afonnes1980 wrote:

    Yes, google Citron research and read the article they wrote about QCOR. I was thinking of investing in it after it pulled back a little, but now I don't want to touch it with a 10 foot pole. I think the article is pretty scary if you own QCOR, except I doubt that their sales are going to decline immediately. There will be a lot more fear in the stock now though, which might make for more volatility.

    I do think it will gain back most of its losses by earnings or after earnings, but I'm not going to put any money on that bet.

  • Report this Comment On July 11, 2012, at 12:29 AM, rodnog wrote:

    I only had time to skim through the report, and it was hard to wade through the rhetoric. From what i gathered, one of the main points that wasn't already covered earlier this year (by Street Sweeper) is the possibility of generic competition. Has anyone gone through it, and verified/debunked their claims?

  • Report this Comment On July 11, 2012, at 2:35 AM, Bilifuduo wrote:

    Yes several analysts have come out to defend Questcor. For example, Piper Jaffray basically debunked Citron's central claim that generic competition is a risk to Questcor by pointing out that, even if generic competition to Questcor's Acthar Gel is somewhat miraculously created, it would be a minimum 30 month stay from wnen the generic is filed to when it can actually be sold.

    Moreover, Citron's motives are to be questioned. It is a boutique short-seller that most likely had a vested interest in seeing Questcor's shares drop.

  • Report this Comment On July 16, 2012, at 3:12 AM, scout627 wrote:

    From June 4, 2012 to July 7, 2012, barely over a month, the stock price of Questcor Pharmaceuticals (ticker QCOR) steadily increased 30% in an otherwise flat market. Then a single short-seller in its blog made what legitimate Wall Street publications later dismissed as “old and misleading claims.” But of course, because of the calculated timing of the short-seller’s attack, it’s bogus claims got publicized before legitimate, objective firms could prepare and publicize their rejections of the short-seller’s claims. So the stock dropped sharply the next day, as investor panic set in.

    The stock gradually but steadily declined for three days, presumably as many investors decided to take profits on the stock’s sharp run-up in the month before. Over the week, the stock gave up most, but not all, of the gains it had made during the previous month. This creates a great buying opportunity. The stock has great growth, and value, and no debt, and is very highly rated by analysts, who predict continued strong growth for many years to come.

  • Report this Comment On July 16, 2012, at 3:16 AM, scout627 wrote:


    FPE: less than 11.4; PEG: 0.5; Profit Margin: 38.5%; ROE: 60%;

    Quarterly Revenue Growth (YOY): 160.5%; Quarterly Earnings Growth (YOY): 243.5%

    Analyst Opinions: 7 Strong Buys, 2 Buys

    Market Cap: $2.75 Billion; Total Debt: 0

    QCOR two year stock price increase: steady climb of 300%; QCOR five-year price increase: 2000%

    QCOR ten-year stock price increase, July 8, 2002 to July 7, 2012: 4833.33%

    Revenue per Share (TTM): $4.42 (more than 10% current market price of $43.13

    Major institutional holders include: FMR, LLC: $357 Million; Blackrock, $185 Million;I

    Vanguard Group, $131 Million; Oppenheimer, $75 Million; State Street, $62 Million

    Major Mutual Fund Holders Include:

    Fidelity Investments [total in three funds, including Fidelity’s Blue Chip Growth Fund}: $400,000 million; Vanguard [total three funds]: $80 million;Oppenheimer, $50 Million; IShares S&P Small Cap 600 Index Fund: $44 million;Baron Small Cap Fund: $34 Million

    Total holdings of just these five institutional holders and five mutual fund companies: over $1.3 billion


    Analyst Opinions: 9.7, VERY BULLISH;

    Revenue Growth (TTM): 120.5%; EPS Growth (TTM v. Prior TTM): 174.6%;

    EPS Growth Projected Next Year Vs. This Year: 42%;

    Projected Long Term EPS Growth (next three to five years): 34.33%/year

    Closing Stock Price on June 5, 2012: $41.00; Closing Stock Price on July 8, 2012: $58.91

    Percentage Increase in Stock Price from June 5, 2012 to July 8, 2012: 30%

    Single short-seller attack: Sunday, July 10, 2012 [(QCOR “mentioned cautiously in [short-seller] blog”

    Closing Stock Price on July 15, 2012: $43.13

    Percentage Drop in QCOR Share Price This Week Based on the Short-seller induced panic: 25.6%

    (erasing MOST BUT NOT ALL of the stock’s price increase over the previous month)

    Wall Street Firms and Publications ATTACKING the Sunday Hit Piece in the Short-Seller’s Blog include:

    Oppenheimer; Merrill Lynch; Zacks; Jeffries (“blog post contains old, misleading claims”); Seeking Alpha (“Questcor Acthar is One Hot Drug,” “Buy Questcor’s Growth Cheaply” and “Questcor: Why Analysts Are Improving Its Ratings”); Motley Fool (“Bad Economic News Won’t Stop These Stocks (short-seller attack on QCOR’s Acthar drug “old and misleading” and “Acthar sales soared in June”) ;

    Seeking Alpha Report, June 15, 2012:

    ”Questcor (QCOR +3.5%) moves higher on positive comments out of its conference call this morning to discuss the commercialization of its rheumatology drug, Acthar. Oppenheimer says its highly encouraged by the not only the drugs prospects, but also the company's ability to execute its strategy, while both Caris and Jefferies say Street estimates don't factor in the drug effectively, and will have to move higher.” (emphasis supplied).

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