Anaheim-based Questcor Pharmaceuticals Inc. has taken its share of blows on investor websites from writers who’ve questioned its dependence on one primary drug, as well insurers’ coverage decisions during the past two years.
That’s changed.
The company is “setting up for a significant upswing in share price,” author EXPstocktrader wrote in a piece posted Oct. 8 on the Seeking Alpha investor website.
The posting noted that the drug maker’s revenue is up roughly 60% this year.
Questcor is also one of the highest-rising stocks in Orange County—shares are up 132% since the start of the year. It had a recent market value of about $3.6 billion.
EXPstocktrader, whose biography indicates employment at E.F. Hutton & Co. and Shearson Lehman and a long history as a shareholder of the drug maker, argued in the piece that there are “compelling reasons to believe Questcor will maintain its robust … revenue growth.”
The reasons include international expansion; a pilot program for its core H.P. Acthar Gel drug for treatment of a lung disease known as refractory sarcoidosis; its $135 million deal for the Synacthen drug in June; and “an existing pipeline with potential catalysts” starting in the current quarter and all through 2014, according to Seeking Alpha.
Acthar is an injectable drug approved for 19 uses. Questcor sells it primarily for nephrotic syndrome, a kidney disorder, and for treating multiple sclerosis flare-ups. It also has rolled out Acthar for rheumatology, including rheumatoid arthritis.
Acthar is Questcor’s primary drug. The company has billed it as a “pipeline in a bottle” because of its many potential uses.
“We believe Acthar has the potential to play a larger role in addressing the autoimmune and inflammatory processes in many serious diseases, and in so doing help many more patients than is currently the case,” Chief Executive Don Bailey said in an Oct. 7 note to shareholders.
Questcor now has “both the financial and scientific resources to pursue our own internal research programs in diabetic neuropathy and amyotrophic lateral sclerosis, two devastating conditions for which patients have virtually no effective treatments available to them,” Bailey said.
EXPstocktrader expressed confidence that Questcor will reach a share price of $90 this year.
Forbes magazine ranked Questcor No. 1 in its “America’s Best Small Companies” rating system this month.
“Questcor is putting its money to work with clinical trials in the works for Acthar related to lupus and idiopathic membranous nephropathy,” author Kurt Badenhausen wrote.
The company is due to release its third-quarter earnings on Oct. 29.
Analysts expect it to have $76 million in profit on $199.7 million in sales during the quarter.
Separately, Questcor got a boost mid-month when the company said it would lift its quarterly dividend to 30 cents a share from 25 cents a share. The dividend will be paid Oct. 30 to shareholders of record as of Oct. 22.
Court Sides with Edwards Lifesciences
The U.S. Supreme Court this month let stand a verdict in favor of Irvine-based heart valve maker Edwards Lifesciences Corp. in a patent battle with Minneapolis-based rival Medtronic Inc. over patents.
Medtronic’s CoreValve unit, which has its origins in Medtronic’s $700 million deal for Irvine-based CoreValve Inc. four years ago, was found to have infringed on a heart valve patent held by Edwards in 2010. A federal jury awarded Edwards $74 million in a verdict upheld last November.
In 2012 Edwards received $84 million from Medtronic, which has 700 workers in Orange County. Medtronic recorded a $245 million charge against its earnings to cover estimated damages.
The case dates back to 2008, when Edwards originally sued CoreValve.
Medtronic attorneys had argued that the disputed patent didn’t contain enough information to reproduce the heart valve, which is required under federal patent law in order to prove infringement.
Medtronic could also face a court order that would bar domestic manufacture or sale of the devices found to have infringed on Edwards’ patent.
Health Net, Prime Do Deal
Ontario-based hospital operator Prime Healthcare Services said it signed a networkwide deal with Health Net Inc. of Woodland Hills. Prime owns Garden Grove Medical Center, Huntington Beach Hospital, La Palma Intercommunity Hospital and West Anaheim Medical Center.
Health Net’s deal gives commercial, Medicare and Medi-Cal members access to Prime’s hospital network, the companies said in a news release. In-network coverage and pricing will also be provided to members who buy Health Net insurance through Covered California, the state’s new health-insurance exchange.
Financial details and the length of the contract weren’t disclosed.
Kaiser Joins Surgery Network
Kaiser Permanente Orange County Irvine Medical Center is one of four hospitals across the country that will participate in a “center of excellence” knee- and hip-replacement surgery network being promoted by the San Francisco-based Pacific Business Group on Health. Employees of large companies, such as Wal-Mart Stores Inc. and Lowe’s Inc. will be eligible to receive hip and knee replacement surgeries at no cost to them.