New Acthar Prescriptions for Multiple Sclerosis (MS) Patients Increase Sharply
UNION CITY, Calif., July 29, 2009 (GLOBE NEWSWIRE) -- Questcor Pharmaceuticals, Inc. (Nasdaq:QCOR) today reported financial results for its second quarter ended June 30, 2009. Net sales totaled $25.3 million for the three months ended June 30, 2009, compared with $24.9 million for the same period of 2008. Net income for the second quarter of 2009 was $9.3 million, or $0.14 per diluted common share compared with net income of $8.8 million, or $0.12 per diluted common share in the second quarter of 2008.
Net sales totaled $48.6 million for the six months ended June 30, 2009, compared with $44.0 million for the same period of 2008. Net income applicable to common shareholders for the first six months of 2009 was $17.0 million, or $0.25 per diluted common share compared with net income applicable to common shareholders of $10.1 million, or $0.14 per diluted common share for the first six months of 2008.
"Our efforts to increase the use of Acthar in treating multiple sclerosis patients who experience exacerbations are generating encouraging results," said Don M. Bailey, President and CEO of Questcor. "During the second quarter, 141 new paid Acthar prescriptions were processed by our reimbursement support center and shipped to MS patients, a 64% increase over 86 new paid Acthar prescriptions shipped in the first quarter of 2009 and a 281% increase over the second quarter of 2008. Our efforts to explain to neurologists the benefits of using Acthar to treat select MS exacerbation patients has led to the marked increase in MS sales. Also, 161 new paid Acthar prescriptions for infantile spasms (IS) were processed by our reimbursement support center and shipped during the second quarter, a decrease of 10% from the first quarter of 2009. We believe the modest decline in IS prescriptions resulted from normal variability in prescription activity in the very small IS patient population," Mr. Bailey added.
While commercial efforts during the quarter focused on growing Acthar prescriptions in the MS market, Questcor also continued to actively fund critically important patient support programs as well as important new medical research with the ultimate aim of improving patient care.
"The Acthar patient assistance program, administered by the National Organization for Rare Disorders (NORD) along with other patient-oriented support programs, has now provided free drug with commercial value of over $32 million to uninsured and underinsured patients since the program's inception in late 2007. In addition to the free drug program, significant financial support continues to be provided to needy patients through NORD's co-pay assistance programs that we sponsor," said Steve Cartt, Executive Vice President. "Furthermore, we have significantly increased our investments in important medical research aimed at improving patient care not only in IS and MS, but also in other difficult-to-treat diseases and disorders having high unmet medical need. Our efforts, in partnership with a number of the nation's leading research institutions, are focused on addressing some of the medical community's toughest treatment challenges, and we now expect to be funding at least 20 important new pre-clinical and clinical research projects during 2009. Our ability to make these critical investments in important new medical research is a direct result of Acthar being the treatment of choice by pediatric neurologists for IS as well as the expanding usage of Acthar in MS," Mr. Cartt concluded.
Second Quarter Key Events
* Diversification of revenues from the concentration in IS improved
as Acthar net sales for MS increased to approximately one third of
total sales. Combined with sales to therapeutic areas other than MS
and IS, total non-IS net sales are about 40% of net sales.
* Shipped 1,564 vials of Acthar to Questcor's specialty distributor
during the second quarter of 2009 compared to first quarter 2009
shipments of 1,429 vials and second quarter 2008 shipments of 1,560
vials.
* Patient enrollment continued in two studies using Acthar to treat
nephrotic syndrome, an on-label indication characterized by
excessive loss of protein from the kidneys into the urine that can
lead to serious consequences, including end stage renal disease.
In addition, Questcor approved funding for a third nephrotic
syndrome study.
* Continued efforts to secure approval from the FDA for Acthar for
the treatment of infantile spasms. In response to a request from
the FDA, Questcor initiated activities to conduct additional
analyses on the data from a supportive efficacy trial.
* Launched a new corporate website to provide comprehensive
information about Acthar and Questcor for patients, families,
healthcare professionals, employees, investors and other key
stakeholders.
Medicaid Rebates and Government Charge-backs
A portion of Acthar sales is for patients covered under Medicaid and other government-related programs. As required by Federal regulations, Questcor provides rebates related to product dispensed to Medicaid patients. In addition, certain other government-supported agencies are permitted to purchase Acthar for a nominal amount from Questcor's specialty distributor, which then charges the discount back to Questcor. These rebates and charge-backs are estimated by Questcor each quarter and are deducted from gross sales in the determination of Questcor's net sales.
The rebate requests for a quarter are generally received and paid in the subsequent quarter. A significantly greater percentage of infants than adults are eligible for Medicaid, which results in more IS patients than MS patients participating in the Medicaid program. The total Medicaid rebate amounts as a percentage of gross sales were 27% in the second quarter of 2009 compared to 26% for the second quarter of 2008.
Regulatory Activity
Acthar is currently approved in the U.S. for the treatment of MS exacerbations, nephrotic syndrome and many other conditions. Acthar is not approved in the U.S. for the treatment of IS, a potentially life-threatening disorder that typically begins in the first year of life. However, pursuant to guidelines published by the American Academy of Neurology and the Child Neurology Society, many child neurologists use Acthar to treat infants afflicted with this condition. Questcor is currently pursuing FDA approval for Acthar in the treatment of IS. Previously, the FDA granted Orphan Designation to Acthar for the treatment of IS. As a result of this Orphan Designation, if Questcor is successful in obtaining FDA approval for the IS indication, Questcor believes that it will also qualify for a seven-year exclusivity period during which the FDA is prohibited from approving any other adrenocorticotropic hormone (ACTH) formulation for IS unless the other formulation is demonstrated to be clinically superior to Acthar.
"In May, we were informed by the U.S. Food and Drug Administration (FDA) that in order for our supplemental New Drug Application (sNDA) for Acthar for the treatment of infantile spasms to be considered a complete submission, we must perform additional statistical analyses relating to data from one secondary study within the filing and provide the data to the FDA. We will resubmit our sNDA to the FDA as soon as these additional analyses are completed," added Mr. Bailey. Cash, Accounts Receivable and Share Repurchase Program At July 27, 2009, Questcor's cash, cash equivalents and short-term investments totaled approximately $71.5 million, and accounts receivable totaled $9.9 million.
During the second quarter, Questcor generated approximately $12.7 million in cash from operations. In addition, during the second quarter, the Company used $4.4 million to repurchase 1.0 million shares of its common stock in open market transactions. The continuing repurchase activities bring the total expenditures for the repurchase of 12 million common and preferred shares to over $57 million since this effort began in 2008.
In May 2009, the Company's Board of Directors increased the common share repurchase program authorization by an additional 6.5 million shares. As of June 30, 2009, Questcor had 63.8 million common shares outstanding, with 7.6 million shares authorized for repurchase under the revised common share repurchase program.
Income Taxes
In 2009, the Company's effective tax rate for financial reporting purposes for the three and six month periods ended June 30, 2009 was approximately 35.5% and 36.4%, respectively, versus 39.0% and 39.7% for the three and six month periods ended June 30, 2008.
