When investing in biotech stocks, investors have to be aware of the numerous risks involved. While binary events such as clinical trial data releases or FDA approval decisions are the most notable, even companies with approved and commercialized drugs can carry serious risks and exposures.

One example of this is Questcor Pharmaceuticals(UNKNOWN:QCOR.DL). Sales of its top drug, Acthar, are growing at incredible rates, but the stock's valuation has dropped considerably. In the following video, Brenton Flynn runs through the situation and highlights the key areas investors need to watch with this stock.

Brenton Flynn 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.