Questcor Pharmaceuticals Inc. is taking steps toward introducing its sole drug to a new market.
The Anaheim-based drug maker said last week that it is considering selling H.P. Acthar Gel for treating systemic lupus erythematosus, a form of lupus.
Lupus affects about 1.5 million Americans, the majority of whom are women. It’s a chronic autoimmune disease in which a person’s immune system attacks the body’s own cells and tissue. Figures from the Lupus Foundation of America show that systemic lupus accounts for 70% of all cases.
Questcor primarily sells Acthar for treating multiple sclerosis flare-ups. The drug is also sold to treat infantile spasms, which are a rare form of epilepsy, and a kidney disease called nephrotic syndrome.
“Unmet Need”
Questcor selected lupus as its new target market “because of the high unmet need for additional treatments in this disease,” Chief Executive Don Bailey said last week on the company’s second-quarter conference call.
The company also is looking at Acthar for lupus because the disease has “a serious and difficult-to-treat nature,” the drug is cleared for three related conditions, and lupus has a “sizable patient population,” Bailey said.
Acthar is approved for use during lupus exacerbations, has an approval for a maintenance drug in lupus, and also is approved for the remission of proteinuria, or excessive protein in the urine, in nephrotic syndrome associated with lupus.
Questcor’s move toward marketing the drug for treating lupus was cheered by in-vestors, who sent Quest-cor shares up more than 25% last week after it reported second-quarter results.
Questcor shares are up 122% this year, to a market value of $2 billion.
During the conference call, Steve Cartt, Questcor’s chief business officer, noted that lupus is similar to multiple sclerosis in that “patients often experience a relapsing-remitting disease pattern.”
Patients with lupus often see periods of remission followed by flare-ups, Cartt said.
“These flare-ups or exacerbations can be severe, prolonged and very debilitating,” he said.
Market Potential
As part of its exploration, Questcor is talking to rheumatologists to help assess the market opportunity, understand market positioning and “determine key factors for commercial success,” Cartt said.
Questcor is now looking into doing a clinical study on Acthar for lupus, said David Young, its chief scientific officer.
Acthar for lupus could add up to $60 million in sales for Questcor by 2015, Mario Corso, a Boston-based analyst with San Diego investment bank Caris & Co., said in a research note.
“Lupus has both maintenance and exacerbations on label, patients are often acutely ill and steroids are widely used on a chronic basis,” Corso said.
Caris expects a clinical study design to be in place by year’s end and commercial sales to start in 2013.
In June, Bailey told attendees at a healthcare conference put on by Stamford, Conn.-based investment bank Jeffries & Co. that Questcor would market Acthar for more conditions beyond its three core markets.
The company’s strategy is “very straightforward—it’s just to grow sales in each of (its core) markets and add other markets,” Bailey said.
During Questcor’s earnings call, Bailey said that the company would not take a look at Acthar for rheumatoid arthritis, despite the fact that it will be working with doctors who treat lupus and rheumatoid arthritis. “That’s not going to be our focus,” he said.
However, Bailey didn’t completely close the door.
“Now, I think if rheumatologists start using Acthar for lupus and have good results … it will be a short trip across the boulevard over to RA,” he said.
• Headquarters: Anaheim
• Founded: 1990
• Business: drug maker
• 2010 revenue: $115.1 million
• Notable: pursuing new markets for its H.P. Acthar Gel, including certain types of lupus
Financial Performance
Questcor’s second-quarter financial performance beat analysts’ expectations. Its profit for the three months ended June 30 was $13.9 million, up 49% from a year earlier. Wall Street was looking for a $13.1 million profit in the quarter.
Revenue rose 62% to $46 million. Analysts were expecting Questcor’s quarterly sales to be $41.8 million.
Sales growth, Questcor said, was fueled by a 147% rise in paid prescriptions for Acthar covering MS flare-ups, with 751 in the quarter.
Acthar is used for multiple sclerosis patients who don’t respond to traditional steroid treatment for flare-ups. It is not a first-line treatment because of its price—a treatment regimen with Acthar costs $40,000 to $50,000 prior to rebates, Bailey said.
Steroids, which are a first-line treatment for MS flare-ups, are much cheaper.
Questcor also said that its nephrotic syndrome prescriptions jumped to 45, versus 18 in the first quarter. The company has since expanded its nephrology sales force from five representatives to 28, Cartt said.
