Why Questcor Pharmaceuticals Fell Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Questcor Pharmaceuticals (Nasdaq: QCOR  ) fell 13% today after reporting better-than-expected earnings. Wait, what?

So what: It's all about the details of the earnings report. Revenue rose 144.6% from a year ago to $112.5 million, topping estimates, and adjusted earnings per share were $0.69, six cents above estimates.

But the problem today is the number of rebated prescriptions of Acthar, the company's $23,000-per-vial drug. One estimate from ThinkEquity estimated that 94 MS prescriptions were rebated for a total of 1,167 including paid, but the actual number was 41 for a total of 1,151 total prescriptions. The trend for nephritic syndrome was similarly disappointing.

Now what: I wouldn't be too worried about the rebate miss, the company has been increasing paid prescriptions at a rapid rate, and both the top and bottom lines were better than expected. Shares now trade at 10 times forward earnings, and if current trends continue, that could be a great deal for investors. Investors can often freak out about small details in earnings reports, but I think the overall picture looks strong, and shares cam move higher from here.

Interested in more info on Questcor Pharmaceuticals? Add it to your Watchlist.

Fool contributor Travis Hoium has no position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw.

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