Company Notifies FDA of Intention to Submit its sNDA for Acthar
for the Treatment of Infantile Spasms in October
Modest Sequential Growth Expected for Third Quarter Acthar Sales
for Treatment of Multiple Sclerosis (MS); Acthar Sales for
Treatment of Infantile Spasms (IS) Down from Second Quarter
Third Quarter Medicaid Rebates Increase from Second Quarter
UNION CITY, Calif., Sept. 21, 2009 (GLOBE NEWSWIRE) -- Questcor Pharmaceuticals, Inc. (Nasdaq:QCOR) today provided an update on corporate developments and sales trends for the third quarter ending September 30, 2009 in advance of management presentations at two investor conferences in the next ten days.
Questcor has notified the U.S. Food & Drug Administration (FDA) that the Company intends to submit its sNDA for H. P. Acthar(R) Gel (repository corticotropin injection or Acthar) for the treatment of IS in October. This notification follows the completion by the Company of additional statistical analyses requested by the FDA. These analyses were conducted on data from one supportive study within the Company's filing.
Acthar is currently approved in the U.S. for the treatment of MS exacerbations, nephrotic syndrome and many other conditions. Acthar is not currently 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. 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 would be prohibited from approving any other adrenocorticotropic hormone (ACTH) formulation for IS, unless that other formulation is demonstrated to be clinically superior to Acthar.
Regarding third quarter sales trends, as previously disclosed by management, the Company continues to expect net sales of Acthar for the treatment of patients with MS exacerbations to grow modestly and sequentially in the third quarter. The Company has previously reported that 141 new paid Acthar prescriptions were processed by Questcor's reimbursement support center and drug shipped to MS patients during the second quarter of 2009. In addition, as previously disclosed, net sales for the treatment of IS continue to be subject to significant quarter-to-quarter variability in the occurrence of this very rare disorder. During the third quarter, management now expects new, shipped and paid Acthar prescriptions for the treatment of IS to be approximately 20 percent less than the 161 new, shipped and paid prescriptions in the second quarter.
As required by federal regulations, the Company provides rebates to States related to Acthar dispensed to Medicaid eligible patients. The estimated liability included in sales-related reserves as of the end of a quarter is composed of the estimated rebate liability associated with the estimated sales to Medicaid patients during the quarter (recent Acthar usage), the estimated rebate liability associated with 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 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, however, certain States submitted what management believes to be unusually high amounts of Medicaid rebates related to older Acthar usage. While management is in the process of verifying the accuracy of these claims, management believes that most are valid claims. As a result of the receipt of these Medicaid claims for older Acthar usage management expects that the rebate provision for the third quarter will be between $2 million and $3 million higher than normal. In addition, although the percentage of Acthar sales for MS to Medicaid patients is approximately the same as in the prior quarters, the percentage of Acthar sales for IS to Medicaid patients has been trending higher on a percentage basis in the third quarter compared to prior quarters. Lastly, the Company has been made aware of a government interpretation of a new regulation affecting reimbursement for a Department of Defense entity. As this government interpretation is currently being disputed, Questcor has not increased its provisional reserve for rebates as a result of this interpretation. However, the Company could further increase the provisional reserve for rebates in the quarter in which the impact on Questcor becomes estimable and probable.
At September 17, 2009, Questcor's cash, cash equivalents and short-term investments totaled approximately $74 million or $1.14 per share, and accounts receivable totaled $10 million.
Final results for the third quarter are expected to be released November 2, 2009.
"Working with the FDA to obtain approval of our sNDA for Acthar to treat IS is the highest priority of our regulatory team," said Don M. Bailey, President and CEO of Questcor. "Currently, new, shipped and paid prescriptions for the treatment of MS exacerbations continue to grow modestly sequentially and continue to be much higher than year ago levels. Our sales to the IS market during the third quarter appear to be impacted by a combination of a lower national birth rate in 2008-2009 and the normal significant variability in prescription activity in the very small IS patient population.
"As a result of the progress we are making in the MS market, we have expanded our MS sales organization to 38 representatives, who we expect to be fully deployed during the fourth quarter," continued Mr. Bailey. "As sales of MS increase as a percentage of total Questcor revenue, Medicaid rebates as a percent of total sales tend to decrease because the different demographics of the MS patient population result in a much lower percentage of Medicaid patients in the MS population than in the IS population. However, this quarter, our adjustment to gross sales to account for sales to various government entities is likely to increase for the reasons discussed above," said Mr. Bailey
About Questcor
Questcor Pharmaceuticals, Inc. is a pharmaceutical company that markets H.P. Acthar(R) Gel (repository corticotropin injection). H.P. Acthar Gel ("Acthar") is an injectable drug that is approved for the treatment of certain disorders with an inflammatory component, including the treatment of exacerbations associated with multiple sclerosis ("MS") and to induce a diuresis or a remission of proteinuria in the nephrotic syndrome without uremia of the idiopathic type or that is due to lupus erythamatosus. In addition, Acthar is not indicated for, but is used in treating patients with infantile spasms ("IS"), a rare form of refractory childhood epilepsy, and opsoclonus myoclonus syndrome, a rare autoimmune-related childhood neurological disorder. The Company also markets Doral(R)(quazepam), which is indicated for the treatment of insomnia characterized by difficulty in falling asleep, frequent nocturnal awakenings, and/or early morning awakenings. For more information, please visit www.questcor.com.
Note: Except for the historical information contained herein, this press release contains forward-looking statements that have been made pursuant to the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "if," "should," "forecasts," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of such terms and other comparable terminology. These statements are only predictions. Actual events or results may differ materially. Factors that could cause or contribute to such differences include, but are not limited to, the following:
-- Questcor's ability to continue to successfully implement its
Acthar-centric business strategy, including its expansion in
the MS marketplace;
-- Questcor's ability to manage its sales force expansion;
-- FDA approval of and the market introduction of competitive
products and our inability to market Acthar in IS prior to
approval of IS as a labeled indication;
-- Questcor's ability to operate within an industry that is highly
regulated at both the Federal and state level;
-- Regulatory changes or actions including Federal or State
health care reform initiatives;
-- Questcor's ability to accurately forecast the demand for its
products;
-- The gross margin achieved from the sale of its products;
-- Questcor's ability to estimate the quantity of Acthar used
by government entities and Medicaid-eligible patients;
-- That the actual amount of rebates and chargebacks related
to the use of Acthar by government entities and Medicaid-
eligible patients may differ materially from Questcor's
estimates;
-- Questcor's expenses and other cash needs for upcoming periods;
-- The inventories carried by Questcor's distributors, specialty
pharmacies and hospitals;
-- Volatility in Questcor's monthly and quarterly Acthar
shipments and end-user demand;
-- Questcor's ability to obtain finished goods from its sole
source contract manufacturers on a timely basis if at all;
-- Questcor's ability to attract and retain key management
personnel;
-- Questcor's ability to utilize its NOLs to reduce income
taxes on taxable income;
-- Research and development risks, including risks associated
with Questcor's sNDA for IS and its preliminary work in the
area of nephrotic syndrome;
-- Uncertainties regarding Questcor's intellectual property;
-- The uncertainty of receiving required regulatory approvals
in a timely way, or at all;
-- Uncertainties in the credit and capital markets and the
impact a further deterioration of these markets could have
on Questcor's investment portfolio;
-- As well as the risks discussed in Questcor's annual report on
Form 10-K for the year ended December 31, 2008 and other
documents filed with the Securities and Exchange Commission.
The risk factors and other information contained in these documents should be considered in evaluating Questcor's prospects and future financial performance.
Questcor undertakes no obligation to publicly release the result of any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
For more information, please visit www.questcor.com or www.acthar.com.