Questcor Pharmaceuticals Inc. continued its run of better-than-expected results with increased sales of its sole drug helped by a boost from prescriptions for what has been a secondary use.
The Anaheim-based drug maker last week posted a first-quarter profit of $40.6 million, up 217% from a year ago and higher than the $34.6 million Wall Street was looking for. It was the fifth-straight quarter that Questcor’s earnings surpassed analyst estimates.
The company’s net profit totaled $38.5 million, including one-time items, up 244% from the $11.2 million a year earlier.
Questcor’s net first-quarter sales more than doubled to $96 million. Wall Street had been expecting sales of $90 million.
Questcor’s “unconventional-but-simple business model continues to produce excellent results,” said Chief Executive Don Bailey on a conference call with analysts and investors.
The company’s sole product is H.P. Acthar Gel, an injectable drug that is approved for 19 different conditions. Questcor has concentrated on selling Acthar for a handful of those uses, primarily for multiple sclerosis flare-ups, a kidney disorder called nephrotic syndrome, and a rare form of childhood epilepsy.
The drug maker shipped 4,111 vials of Acthar overall during the quarter, compared with 2,010 vials in last year’s first quarter. The cost of a prescription ranges from $40,000 to $100,000, depending on the number and size of doses.
Prescriptions for the drug’s core use for multiple sclerosis flare-ups nearly doubled to 1,000 in the first quarter from a year earlier.
A secondary use of the drug also chipped in for the big year-to-year gain.
Bailey said “a strong increase in paid prescriptions” for nephrotic syndrome, which is marked by high levels of protein in a patient’s urine, was a reason for Questcor’s quarterly performance during the call.
Those prescriptions totaled 238 in the first quarter, up from 18 in the year-ago quarter. Questcor accelerated its nephrology sales program last October after a pilot program.
“The expected revenues from nephrotic syndrome prescriptions are accelerating to the point that by our calculation, nephrotic syndrome (prescription) value now exceeds MS,” Bailey said. “From a treatment perspective, the number of vials needed to treat a nephrotic syndrome patient averages over four times the number of vials needed to treat a MS patient.”
Jobs
Questcor also is adding jobs to support its growth.
It will hire 30 salespeople for its nephrology sales force and another 30 for its neurology sales force, according to Chief Operating Officer Steve Cartt.
Cartt said that insurance reimbursement for Acthar and nephrotic syndrome “continues to be very good, with more than 85% of private insurance prescriptions covered.”
Questcor also identified another potential growth area. It plans to start a pilot sales program for rheumatology, Cartt said.
More Studies
David Young, Questcor’s chief scientific officer, said that the company also has about 20 company-sponsored preclinical and clinical studies ongoing, and is supporting another 20 ongoing studies.
“As we learn more about how Acthar works, we are particularly intrigued by the parent immune-modulating effects of Acthar,” Young said.
Questcor believes the characteristic could provide benefits to many patients who are “underserved” by available therapies in various autoimmune and inflammatory diseases, such as lupus.
“Acthar can truly be considered a pipeline within a drug,” Young said.
Questcor’s study of Acthar for lupus “potentially could be helpful to facilitate the commercialization effort of this indication later this year,” Yale Jen, an analyst with Newport Beach-based Roth Capital Partners LLC, said in a research note.
New Areas
Jen also credited Questcor’s sponsorship of clinical studies on the use of Acthar in new areas.
Such studies “could potentially provide a better perspective to realize the full potential of Acthar and with only limited cost,” he wrote.
Jen said unmet medical needs and an experienced sales force “are the two main strengths to support market-share growth.”
