QCOR defends themselves... Questcor Pharmaceuticals Inc. (QCOR) defended the unique properties of its
blockbuster drug Acthar on Friday as it tried to stem a decline in its share
price that was kicked off earlier this week by a report from a short-selling
research firm.
The pharmaceutical company has seen its earnings surge in recent quarters on the
strength of its sole product, a steroid alternative that has been approved by the
Federal Drug Administration for a range of uses, including the treatment of
multiple sclerosis, a kidney affliction called nephrotic syndrome, and an
epileptic condition affecting babies.
Despite the upward trend, the company's shares have taken a dive since Tuesday,
when Citron Research, a firm run by short-seller Andrew Left, criticized the
company's tactics of promoting the drug.
Shares, which dropped as much as 8.5% Friday, were recently off 4.9% to $43.26.
The stock is down 25% from Monday's close.
In a presentation at a health-care conference Friday, the company said it shipped
an estimated 4,710 vials of Acthar in the second quarter, up from 4,111 in the
first quarter and almost doubling the 2,430 vials shipped last year. Questcor's
first-quarter profit more than tripled on increasing Acthar shipments.
At the heart of the criticism was Citron's claim that the drug's active
ingredient, a hormone called ACTH, is well-known and would be easily replicated
in a generic version.
The company has declined to comment on the report as a whole. But its executives
on Friday disputed contentions that the drug, which is derived from the pituitary
glands of pigs, is susceptible to competition.
Along with ACTH, the drug contains "multiple peptides" with "multiple
pharmacological properties" with many indications, Questcor Chief Scientific
Officer David Young said. A generic maker would have to show bioequivalence of
all these peptides, Mr. Young said, calling the likelihood of this "pretty slim."
James Molloy, an analyst at ThinkEquity, said he was satisfied with Questcor's
explanation, and agreed that generic competition was unlikely. He compared Acthar
with Premarin, an estrogen replacement derived from horse urine, which is
manufactured by Pfizer Inc. (PFE). Like Acthar, a form of Premarin has been
available for decades and would be vulnerable to generic substitutes if it could
be replicated, said Molloy, but so far, its unique biological properties have
proved tough to match precisely enough to satisfy regulators.
Questcor bought the rights to orphan drug Acthar in 2001 from Aventis SA. Despite
generating almost no sales for Aventis, Questcor made $218.2 million off Acthar
in 2011. |
