It has been more than a year since Questcor's (NASDAQ: QCOR) stock took a dip after the announcement that the company was facing investigation from federal authorities about its marketing practices. The stock lost more than half of its value. Since then, Questcor's stock had regained its lost value before the company once again announced expanded investigation. As a result, the stock fell in after-hours trading. The announcement came during the earnings call when Questcor announced its third-quarter earnings, which were otherwise hugely impressive.

Earnings: Impressive, as expected
First of all, let's take a look at the performance of the company during the third quarter of the year. Questcor is one of the very few companies that has been able to show immense sales growth over the past three years. Year-over-year sales growth for the third quarter was 68%, reaching more than $236 million as compared to $140 million during the same quarter last year.

As I have mentioned in my previous articles, Questcor's drug Acthar can be prescribed for 19 conditions. The drug was mainly generating revenue from three conditions, however: nephrotic syndrome, multiple sclerosis, and infantile spasms. The company is trying to increase sales from other conditions as well. The growth in sales during the third quarter was augmented by solid growth from rheumatology segment, as rheumatologists prescribed Acthar for a large number of patients.

Earnings numbers were even more impressive as Questcor recorded GAAP earnings of $1.52 per diluted share, compared to $0.91 per diluted share for the same quarter of 2012. There was a substantial increase in overall vial shipments (45%) during the quarter -- Questcor shipped 8,132 vials of Acthar during the quarter compared with 5,590 vials a year ago. One of the most important numbers to gauge the true growth in revenues is the new paid prescriptions for Acthar. There was about 30% increase in paid prescriptions for Acthar as compared to the same quarter last year.

New paid prescriptions for the third quarter were between 2,450 and 2,500, about 30% more than the third quarter of 2012. The increase in prescriptions came from all four conditions. The increase in nephrotic syndrome was about 7% from the last year, as the company received 370 to 380 new prescriptions in the nephrotic syndrome. Multiple sclerosis is the most mature segment for Questcor, as there were 1,370 to 1,400 new paid prescriptions for the segment -- about 4% more than the corresponding quarter last year and accounting for about 30% of total Acthar sales. There was an increase of about 33% in new prescriptions for infantile spasms, but the most impressive growth came from the rheumatology segment. Questcor has had only two full quarters of marketing the drug for rheumatology, and new prescriptions for the segment increased by 43% from 450 to 460 new paid prescriptions for the segment.

Investigation about marketing practices
Questcor is no stranger to investigations by federal agencies -- the company has gone through such investigations in the past and come out unharmed. The current investigation was started more than a year ago, and the new development is just an expansion of the ongoing process. Now, the U.S. Attorney's office in Philadelphia has also started investigation on the matter. The response from the investors is normal as some investors are looking to clear their positions. The fact remains, however, that Acthar is a life-saving drug that has no alternative and it can be prescribed for a number of conditions.

The company's fundamentals are strong: There is demand for its drug and the company has the ability to meet that demand and medical need. I believe that the dip in price will again prove to be temporary and the stock will start to grow again as Acthar becomes a $1 billion-a-year drug.

Other orphan drug manufacturers to consider
Alexion Pharmaceuticals (ALXN) is another orphan drug manufacturer you might conisder. Its drug Soliris is prescribed for paroxysmal nocturnal hemoglobinuria, or PNH, an ultra-rare disease which causes the red blood cells to release hemoglobin into urine. The disease can significantly affect the quality of life and cause death. Soliris is the only drug approved to treat the condition, and costs more than $400,000; this makes it the most expensive drug in the world.

The company recently announced its third-quarter earnings, showing revenue growth of 36% to $400.4 million. Adjusted earnings per share rose to $0.83, up from $0.60 in the same quarter last year. As a result, the company's stock went up substantially.

Isis Pharmaceuticals (IONS -1.44%) is focused on developing RNA-based therapies. Isis' business model is a little different from its peers, however -- the company develops treatments and licenses the rights to the more established players in the sector. At the moment, Isis has only one drug in the market, Kynamro, which is marketed by Genzyme. The drug is prescribed for patients with a genetic disease that causes high cholesterol. Kynamro costs $176,000, substantially lower than a competing drug (Aegerion Pharmaceuticals' Juxtapid, which costs between $235,000 and $295,000 per year.)

Summary
I believe Questcor remains a solid investment as the company has shown continued growth. Acthar has a very strong market, and doctors trust the drug when it comes to treating a number of rare diseases. I believe the fall in price due to the investigations will be temporary and the growth prospects of the firm will outweigh its risks.