Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why Questcor Pharmaceuticals, Inc. Shares Briefly Popped

By Sean Williams - Mar 3, 2014 at 2:16PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Questcor Pharmaceuticals shares rebound after Mizuho Financial comes to its defense. Find out why your best bet might be avoiding this stock altogether at the moment.

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), a biopharmaceutical company focused on developing therapies to treat autoimmune and inflammatory disorders, briefly jumped as much as 11% earlier in the trading session after a research firm Mizuho Financial came to its defense. Shares are up a more modest 5% as of this writing.

So what: Shares of Questcor were hammered late last week on a report from noted short-selling firm Citron Research, which claimed that Questcor's lead product, Acthar Gel, was in danger of being pulled from the market due to questionable clinical results of the drug. The FDA confirmed that it was reviewing the materials brought forth by Citron in an email to Bloomberg, adding to investors' fears. Mizuho, however, believes there was merely a label error in testing, and maintains its buy rating on Questcor with a price target of $93.

Now what: Questcor's growth with regard to Acthar has been absolutely phenomenal over the past year, but these gray clouds involving its questionable clinical results simply refuse to go away. Hopefully, with the FDA now examining Citron's lab findings we can get a verdict, once and for all, whether Acthar Gel is as amazing as it appears or if Citron's concerns were warranted. If Acthar is cleared, it could certainly head toward triple digits given its growth rate. Conversely, if Acthar's lab results do raise concerns, with 19 indications and no other FDA approved drugs, Questcor could find itself in a world of hurt. Personally, I'd suggest avoiding this situation altogether until we have better clarity.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
633%
 
S&P 500 Returns
140%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/07/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.