| Questcor Reports Third Quarter Financial Results | Questcor Reports Third Quarter Financial Results
- Net Sales and EPS Increase Over 65% Compared to Prior Year -
- Vial Shipments up 45% Over Prior Year -
- Record MS Prescriptions; Rheumatology Largest Growth Contributor -
PR Newswire
ANAHEIM, Calif., Oct. 29, 2013
ANAHEIM, Calif., Oct. 29, 2013 /PRNewswire/ -- Questcor Pharmaceuticals, Inc. (NASDAQ: QCOR) today reported financial results for the third quarter and nine months ended September 30, 2013.
Three Months Three Months Ended 09/30/13 Ended 09/30/12 Percentage Change ------------------- ----------------- ------------------ ------------------ Net Sales $236.3 Million $140.3 Million 68% ------------------- ----------------- ------------------ ------------------ GAAP Diluted EPS $1.52 $0.91 67% ------------------- ----------------- ------------------ ------------------ Non-GAAP Diluted EPS $1.68 $0.97 73% ------------------- ----------------- ------------------ ------------------ Nine Months Ended Nine Months Ended 09/30/13 09/30/12 Percentage Change ------------------- ------------------ ------------------ ----------------- GAAP Net Sales $556.0 Million $348.8 Million 59% ------------------- ------------------ ------------------ ----------------- Non-GAAP Net Sales $567.5 Million $348.8 Million 63% ------------------- ------------------ ------------------ ----------------- GAAP Diluted EPS $3.32 $2.12 57% ------------------- ------------------ ------------------ ----------------- Non-GAAP Diluted EPS $3.82 $2.25 70% ------------------- ------------------ ------------------ -----------------
Net sales for the third quarter ended September 30, 2013 were $236.3 million, up 68 percent from $140.3 million in the third quarter of 2012. The increase was driven by the expanded usage of H.P. Acthar(R) Gel (repository corticotropin injection) in multiple therapeutic areas. The most significant increase in net sales was driven by rheumatologists prescribing Acthar for patients suffering from dermatomyositis, polymyositis, rheumatoid arthritis, and systemic lupus erythematosus. The increase in net sales was also driven by the continued prescribing of Acthar by nephrologists in the treatment of nephrotic syndrome (NS) and by neurologists in the treatment of multiple sclerosis (MS) relapses and infantile spasms (IS). BioVectra, the company's specialty manufacturing subsidiary, acquired in January 2013, had net sales of $9.0 million in the third quarter of 2013. GAAP earnings for the third quarter of 2013 were $1.52 per diluted common share, up 67 percent from $0.91 per diluted common share in the third quarter of 2012.
Questcor shipped 8,132 vials of Acthar during the third quarter of 2013, up 45 percent compared to 5,590 vials in the year ago quarter. As the Company has previously disclosed, quarterly vial shipments are subject to significant variation due to the size and timing of individual orders received from Questcor's distributor. The timing of when these orders are received and filled can significantly affect net sales and net income in any particular quarter. The Company believes that investors should consider the Company's results over several quarters when analyzing the Company's performance.
"Our net sales continued to expand with rheumatology, neurology, and nephrology exhibiting growth year-over-year," said Don M. Bailey, President and CEO of Questcor. "This quarter's performance was primarily driven by a continued increase in Acthar usage among both rheumatologists and nephrologists. Additionally, there was a record number of paid prescriptions for MS relapse during the quarter. The overall increased use of Acthar to treat a wide variety of patients encourages us to further increase our R&D investment and has specifically led to the initiation of two new phase II studies this year in Amyotrophic Lateral Sclerosis (ALS) and Acute Respiratory Distress Syndrome (ARDS). We also continue to build the body of evidence for Acthar in current and potential new indications through our investment in company-sponsored studies and our support of investigator-initiated studies. A significant focus of these efforts is on developing a better general understanding of melanocortin biology, which could significantly influence our long term R&D strategy for both Acthar and our newest compound Synacthen."
"As Questcor's annualized sales approach the $1 billion mark, we believe we have established a strong foundation for growth and remain excited about our future prospects," continued Mr. Bailey. "Our future will be driven by four areas: increased penetration of Acthar in current markets and expansion into additional on-label markets, globalization of Synacthen and Acthar, development of new indications and markets, and the appropriate deployment of cash that we believe will be generated from these activities."
"New paid prescriptions for Acthar were strong across all of our markets, totaling approximately 2,450 to 2,500 in the third quarter, about a 30% increase from a year ago," commented Steve Cartt, Chief Operating Officer of Questcor. "We continue to experience a strong early level of prescribing of Acthar in the rheumatology-related indications dermatomyositis, polymyositis, lupus and rheumatoid arthritis. There were 450 to 460 new paid Acthar prescriptions for these FDA-approved rheumatology indications during the third quarter, up about 43% from the second quarter. Notably, in only our second full quarter of promotion to rheumatologists, rheumatology prescriptions already account for nearly a quarter of total Acthar business."
Mr. Cartt continued, "There were also 370 to 380 new paid prescriptions for NS in the quarter, up about 7% year-over-year. NS prescriptions currently account for about one third of our Acthar business. Particularly encouraging was the record level of Acthar prescriptions for the treatment of MS relapse, despite this being one of our more mature markets. During the third quarter there were 1,370 to 1,400 new paid prescriptions for MS relapse patients, up about 4% year-over-year. MS relapse prescriptions currently represent between 25% and 30% of our Acthar business. New paid prescriptions for IS were also up, reaching 225 to 230, an increase of 33% year-over-year."
"We have recently begun hiring personnel for our initial effort to educate pulmonologists about Acthar in the treatment of respiratory manifestations of symptomatic sarcoidosis, an orphan inflammatory disease with high unmet medical need for which Acthar is FDA-approved. We expect to complete building this pilot sales team of 5-10 sales reps and initiate sales calls on this new Acthar physician audience by the end of the fourth quarter," concluded Mr. Cartt.
The Company believes that insurance coverage for Acthar continues to remain favorable, when Acthar is prescribed for indications for patients in need of an additional FDA-approved treatment alternative.
To allow comparable analysis, the Company has defined "new paid" prescriptions in the above paragraphs to include prescriptions covered by commercial carriers, Medicare, Medicaid and Tricare in all periods regardless of the rebate percentage applicable in those periods. The numbers are based on internal company estimates and do not include prescriptions filled through the Company's free drug program, administered by the National Organization for Rare Disorders.
Year-to-Date Financial Results
Net sales for the first nine months of 2013 were $556.0 million, with BioVectra contributing $24.9 million. Net sales in the first nine months of 2012 were $348.8 million. GAAP earnings for the first nine months of 2013 were $3.32 per diluted common share, compared to $2.12 per diluted common share for the comparable period of 2012.
Research and Development Progress
Research and development (R&D) investment increased 114% to $17.1 million in the three months ended September 30, 2013, as compared to $8.0 million for the year ago period. R&D investments were $40.1 million for the first nine months of 2013, as compared to $22.1 million for the year ago period. The increased R&D investment reflects the Company's efforts to further clarify the potential immune-modulating properties of Acthar and Synacthen and identify mechanisms of action applicable to other inflammatory and auto-immune diseases with high unmet medical need. The Company is also identifying new patient populations in which to evaluate Acthar and Synacthen through clinical studies. Questcor is funding research and development, both in-house and through independent physician sponsored studies, for the following:
Label Enhancement Programs:
-- Acute Respiratory Distress Syndrome (ARDS): The Company announced on October 22, 2013 that it will commence a Phase 2 study to explore the efficacy and safety of Acthar in patients with ARDS. ARDS is an acute life threatening lung condition that can result from pulmonary and non-pulmonary infections or a multitude of other serious conditions. -- Amyotrophic Lateral Sclerosis (ALS): Patient recruitment continues at thirteen U.S. clinical sites in a company-sponsored dose-ranging Phase 2 clinical trial to evaluate the safety and tolerability of Acthar in patients with ALS, often referred to as Lou Gehrig's disease. ALS is a life-threatening, progressive neurodegenerative disease that affects nerve cells in the brain and the spinal cord. -- Diabetic Nephropathy: Enrollment continues in a company-sponsored Phase 2 trial to evaluate the efficacy and safety of Acthar in patients with diabetic nephropathy, one of the most common causes of end-stage renal
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