Sales for the treatment of multiple sclerosis up 14% sequentially
 Sales for the treatment of infantile spasms down 26% sequentially
     Delayed state Medicaid claims hurt net sales and earnings
  Third quarter 2009 net income per share of $0.02 after one-time
                              Charges
 Supplemental New Drug Application for infantile spasms submitted
                Conference Call Today at 4:30 PM ET

UNION CITY, Calif., Nov. 2, 2009 (GLOBE NEWSWIRE) -- Questcor Pharmaceuticals, Inc. (Nasdaq:QCOR) today reported financial results for its third quarter ended September 30, 2009. As previously reported on September 21, 2009, Questcor's financial results were negatively affected by the combination of a lower number of shipped and paid prescriptions for the treatment of infantile spasms (IS) and unusually high amounts of Medicaid rebates related to older Acthar usage. These factors were partially offset by the continued sequential improvement in sales of Acthar in the multiple sclerosis (MS) market.

Units Shipped; Gross Sales.

During the third quarter of 2009, Questcor shipped 1,354 vials of Acthar compared to 1,500 vials in the third quarter of 2008 and 1,564 vials in the second quarter of 2009. As a result of the reduction in vials shipped, gross sales were 10% lower in the third quarter of 2009 compared to the third quarter of 2008. There has been significant variability in prescription activity on a monthly basis in the use of Acthar in the treatment of IS due to the very small IS patient population. For each of the three months in the third quarter of 2009, the monthly usage of Acthar for IS was at the low end of its two year historic monthly range. It is possible that a portion of the usage decline was related to a lower national birth rate this year and the greater use of alternative therapies for the treatment of IS.

Sales Reserves; Net Sales.

Net sales are calculated by deducting sales reserves from gross sales. These sales reserves account for Medicaid rebates, other government program rebates and chargebacks, and co-pay assistance programs. Sales reserves for the third quarter of 2009 were significantly larger than prior quarters principally due to several factors:

 -- The third quarter sales reserve included a one-time adjustment
    of $4.6 million principally for unusually high amounts of
    Medicaid rebates related to older Acthar usage.
 -- As a result of a new assessment of the Company's liability
    under a Department of Defense regulation, Questcor reserved an
    additional $1.4 million for rebates related to a health
    coverage program called Tricare.  Approximately $0.4 million of
    this amount related to the second quarter of 2009.
 -- Sales reimbursed by Medicaid represented a larger percentage of
    overall IS sales than in previous periods.  While total paid
    Acthar prescriptions for the treatment of IS processed through
    our reimbursement support center dropped by approximately 26%,
    from 161 in the second quarter of 2009 to 119 in the third
    quarter, the number of Medicaid-reimbursed IS prescriptions
    remained relatively flat.  Questcor believes this pattern may
    be due to an increasing number of families losing employer-paid
    healthcare insurance and an easing of Medicaid eligibility
    requirements in certain states.

Net sales totaled $13.9 million for the three months ended September 30, 2009 compared to $24.2 million in the year earlier period. Net income for the third quarter of 2009 was $1.2 million, or $0.02 per diluted common share compared to $9.0 million, or $0.13 per diluted common share in the year earlier period.

Net sales totaled $62.4 million for the nine months ended September 30, 2009, compared with $68.2 million for the same period of 2008. Net income applicable to common shareholders for the first nine months of 2009 was $18.2 million, or $0.27 per diluted common share compared with net income applicable to common shareholders of $19.0 million, or $0.26 per diluted common share for the first nine months of 2008.

"While we are disappointed by our third quarter financial results, several recent positive developments cause us to remain optimistic about the direction and potential for our company," said Don M. Bailey, President and CEO. "The results from our efforts in the MS market are encouraging. New, shipped, and paid Acthar prescriptions for the treatment of MS exacerbations grew sequentially over the second quarter and continue to be much higher than year ago levels. We invested in the quarter in our MS sales organization, and we now have 38 representatives who are fully deployed promoting Acthar for this use," Mr. Bailey continued. "In addition, we recently resubmitted our sNDA for H. P. Acthar(R) Gel (repository corticotropin injection) for the treatment of IS. Our submission follows the completion by the Company of additional statistical analyses requested by the FDA. Approval of the IS indication would allow Questcor to promote the use of Acthar in treating IS, enabling Acthar to compete more effectively with other therapies, and also to broaden our public education efforts regarding the importance of early diagnosis and effective treatment of IS.

"We have also expanded our senior management team and, in the process, significantly expanded our research and drug development capability as well as our regulatory expertise. Lastly, Questcor is now funding 25 clinical and pre-clinical studies to explore potential new uses for Acthar and to better understand the drug's mechanisms of action. Many of these studies are examining the use of Acthar in the treatment of nephrotic syndrome, an on-label indication for Acthar that represents a large unmet medical need," Mr. Bailey added.

"During the third quarter, we shipped 161 new paid Acthar prescriptions to MS patients through our reimbursement support center, a 14% increase over the second quarter of 2009 and a 188% increase over the third quarter of 2008. Our outreach to neurologists regarding the efficacy of Acthar in treating select patients suffering from MS exacerbations has led to the marked increase in MS sales. Also of importance, Medicaid rebates are a significantly lower percentage of sales in MS than in IS due to the different demographics of the MS population," concluded Mr. Bailey.

"Insurance coverage for Acthar continues to be very strong, with well over 95% of IS cases being approved by payors during the quarter," said Steve Cartt, Executive Vice President. "In addition, the Acthar patient assistance program administered by the National Organization for Rare Disorders (NORD) continues to operate effectively. This and other patient oriented programs supported by Questcor have provided free drug with commercial value of over $37 million to uninsured and underinsured patients in the last two years. In addition, through the full rebates for Acthar that we extend to state Medicaid programs, we have essentially provided free drug to Medicaid patients totaling over $60 million since late 2007. We also provide significant financial support to needy patients through the NORD co-pay assistance programs that we sponsor. Beyond our extensive free drug and patient assistance programs, we have also significantly increased our investments in important medical research aimed at improving patient care with the use of Acthar, not only in IS and MS, but also in other difficult-to-treat diseases and disorders. We are now funding several studies evaluating Acthar in the treatment of nephrotic syndrome, a disorder involving deterioration of kidney function that often leads to the need for renal dialysis or transplant. We are also now beginning to fund exploratory pre-clinical research evaluating whether Acthar could have potential value in the management of amyotrophic lateral sclerosis (also known as ALS or Lou Gehrig's Disease) and traumatic brain injury. Both of these are devastating conditions for which new treatments are desperately needed," Mr. Cartt concluded.

Medicaid Rebates and Government Charge-backs

As required by federal regulations, the Company provides rebates to state Medicaid programs for Acthar that is dispensed to Medicaid-eligible patients. The estimated liability included in sales reserves as of the end of a quarter is composed of the estimated rebate liability associated with the estimated sales to Medicaid patients during that quarter (Recent Acthar Usage), the estimated rebate liability associated with estimated sales to Medicaid patients in prior quarters that have not yet been billed to the Company (Older Acthar Usage), and the estimated rebate liability associated with estimated Acthar inventory in the distribution channel as of the end of the quarter (Future Acthar Usage). Generally, the vast majority of Medicaid rebates for a period are submitted by, and paid to, the States by the end of the quarter following the quarter in which the rebate reserve is established. During the third quarter, as the Company reported on September 21, 2009, certain states submitted unusually high amounts of Medicaid rebates related to Older Acthar Usage. The Medicaid rebate portion of sales reserves for the third quarter was $14.1 million consisting of $9.5 million for Recent Acthar Usage and $4.6 million for Older Acthar Usage. The Medicaid rebate related to Recent Acthar Usage as a percentage of gross sales was approximately 30% in the third quarter of 2009.

In addition, as disclosed in September, as a result of a new assessment of our liability under a Department of Defense regulation, Questcor reserved an additional $1.4 million for rebates related to a health coverage program called Tricare.

Regulatory Activity

Acthar is currently approved in the U.S.