Unlike last year, extreme volatility hasn't been too big of an issue so far for Questcor Pharmaceuticals (NASDAQ:QCOR). The stock is up more than 120% year-to-date, with only a few relatively mild setbacks along the way.

Questcor reports its third-quarter results later this month. Could volatility rear its head again -- or is the biotech poised to continue its winning ways? Here are three key things for investors to watch.

1. The "old faithful" indications
Like the famous geyser in Yellowstone National Park, several indications for Questcor's Acthar gel have proven to faithfully deliver results. However, the first quarter of this year upset that predictability. Shipped vials of Acthar dropped for the first time in years, with multiple sclerosis prescriptions down 17% compared to the previous quarter.

All signs point to this decline being a temporary phenomenon. Questcor roared back in the second quarter. Acthar sold well in its mainstay indications of nephrotic syndrome, multiple sclerosis, and infantile spasms.  

It needs to continue to do so. Nephrotic syndrome and multiple sclerosis account for nearly two-thirds of Questcor's revenue. Any significant issues could send shares reeling.

2. The rise of rheumatology
A rapid increase in rheumatology prescriptions emerged as one of Questcor's biggest success stories from the second quarter. The new indication stood out as the fastest-growing area for Acthar.

Questcor CEO Don Bailey said in July that the first full quarter of marketing Acthar for rheumatology indications represented the best commercial launch that the company has undertaken yet. In only a few months, rheumatology prescriptions jumped into second-place behind nephrotic syndrome, bumping multiple sclerosis down a notch.

Continued growth at those levels would propel Questcor shares higher. Even if the torrid pace levels off somewhat, solid third-quarter results should help the company beat earnings estimates.

3. Where the puck is going
As hockey legend Wayne Gretzky's father once said to him, "Skate to where the puck is going, not where it has been." Rheumatology is certainly a key area where Questcor's puck is headed, but it's not the only one.

The company has accelerated its efforts in pulmonology, recently piloting efforts to commercialize Acthar as a treatment for respiratory manifestations of symptomatic sarcoidosis. Questcor also has two mid-stage studies in process -- one for diabetic nephropathy and the other for amyotrophic lateral sclerosis, or ALS, also known as Lou Gehrig's disease.

Watch for any new announcements about these initiatives in the company's quarterly update. It's probably too early for Questcor to have much news about ALS, but this could be a tremendous opportunity if clinical studies go well. Sanofi's (NYSE:SNY) Rilutek currently stands as the sole drug approved for the disease. However, it's not extremely effective and only generates around $50 million annually for the French drugmaker.

Biogen Idec (NASDAQ:BIIB) hoped to become the second drug approved for ALS. However, the biotech canceled its development program for dexpramipexole after the drug failed to achieve the primary endpoint for a phase 3 study earlier this year. Cytokinetics (NASDAQ:CYTK) is now the company with the most advanced development efforts: Its ALS drug tirasemtiv is currently in phase 2 testing. 

Will Questcor continue to score?
We'll soon know how Questcor's third quarter turned out. There's always a chance that the company could disappoint as it did in the first quarter of this year.

If I had to venture a guess, though, I'd say the odds are good that the biotech will again report excellent numbers. The stock is down more than 18% since late August -- a relatively tame pullback for Questcor. With good news later in October, I think that shares could regain much, if not all, of the lost ground.

 

Fool contributor Keith Speights has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.