The company that topped the Business Journal’s 2014 list of the fastest-growing large public companies based in Orange County has already taken itself out of the running for next year’s title.
That’s because Questcor Pharmaceuticals Inc.’s time as a public company ended in August when Mallinckrodt PLC, a drugmaker with a tax-friendly headquarters in Ireland and operations headquarters in St. Louis, completed its $5.8 billion cash-and-stock buy of the drugmaker.
Growth
Questcor, which was based in Anaheim and sells drugs for treating conditions such as rheumatoid arthritis and multiple sclerosis flare-ups, posted 186.6% revenue growth for the three years ended June 30.
It makes H.P. Acthar Gel, an injectable drug used for a diverse group of conditions. Acthar is also used to treat nephrotic syndrome, a kidney disorder, and infantile spasms, a rare form of epilepsy.
It added the Synacthen drug family in a 2013 deal with Switzerland-based Novartis AG. Synacthen and Synacthen Depot have been approved in 40 overseas markets for a variety of diseases, including ulcerative colitis. They are not yet approved for use in the U.S.
Questcor’s growth came primarily through adding more uses for Acthar, which was originally approved in the early 1950s. The drug is approved for 19 conditions, including its major commercial areas of focus: neurology, rheumatology and nephrology.
The drug’s versatility was a big part of Mallinckrodt’s interest in Questcor.
“Questcor is another ideal strategic fit for Mallinckrodt. Acthar is an exciting product and naturally driven, injectable, complex biological product,” said Mallinckrodt Chief Executive Mark Trudeau on a May earnings call with analysts and investors.
Mallinckrodt has relationships with rheumatology and urology specialist doctors that “we believe will ultimately make the value of Acthar understood by more physicians and available to more patients,” Trudeau said.
He added that the company will “maximize the value” of Synacthen and Synacthen Depot.
Questcor’s local operation has basically remained intact in Anaheim with some changes at the top. It’s now known as Mallinckrodt Autoimmune and Rare Diseases.
Steve Cartt, previously Questcor’s chief operating officer, is running the business and reports directly to Trudeau.
Don Bailey, previously Questcor’s chief executive, is now on Mallinckrodt’s board. He moved Questcor to Anaheim from the Bay Area in 2010 and set up its then-headquarters near his Yorba Linda home.
Questcor also notably mixed it up with short sellers during its time as a public company.
It released a lengthy federal filing shortly before announcing the Mallinckrodt deal that addressed what it called a “bear raid” by short sellers.
Questcor frequently landed in short sellers’ crosshairs for several reasons, particularly relating to questions about Acthar’s effectiveness, insurers’ coverage, and its price—
Acthar can cost about $30,000 per vial.
“Despite [our] focus on, and track record of creating value for Questcor’s stakeholders, including patients, physicians and shareholders, since at least January 2012, Questcor has been the subject of a ‘short attack’ or a ‘bear raid,’ ” the drugmaker said in a Securities and Exchange Commission filing.
Questcor’s shares rose, even with the gyrations.
The filing also included excerpts from an earlier SEC filing addressing whether Acthar was a steroid, how many doctors prescribed the drug, and Questcor’s support of programs designed to help patients pay for Acthar.
‘Noise’
Questcor dismissed what it referred to as “noise” from its critics.
“The key point often overlooked in all of this background noise, however, is something that Questcor employees hear regularly from doctors—that Acthar often helps patients with serious medical conditions who are in need of an alternative treatment option.”
