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BUSINESS PERSON OF THE YEAR – Healthcare: Don Bailey

Don Bailey did more than pilot his company through some turbulence—he managed to make its shares soar.

The chief executive of Anaheim-based drug maker Questcor Pharmaceuticals Inc. saw the company’s flagship H.P. Acthar Gel drug continue to grow in its core and new markets. He also struck a deal for a new drug and weathered the storms of controversy stirred up by short sellers and media scrutiny.

Questcor shares ended 2013 up 109% to a market value of $3.1 billion. Its performance earned Bailey recognition as the Business Journal’s Businessperson of the Year in the healthcare industry.

Bailey said in an email interview that he feels “very good overall” about Questcor’s performance.

“2013 was another year of significant growth,” he wrote. “Sales and earnings should be up more than 50% versus 2012 and [our] stock price has doubled.”

Acthar, which is injected, is primarily used for treating the kidney disorder nephrotic syndrome, as well as multiple sclerosis flare-ups, rheumatoid diseases and infantile spasms, a rare form of epilepsy.

Questcor’s revenue has mushroomed under Bailey’s leadership from $143.4 million in the 12 months ended in June 2011 to $620.6 million for the period ended June 2013.

It launched clinical programs for Acthar, including one in October to examine the drug for treating acute respiratory distress syndrome. A second-phase trial to examine Acthar for treating amyotrophic lateral sclerosis, or Lou Gehrig’s disease, launched in July.

“Our strong financial profile has allowed us to move into new indications [for Acthar] faster than we have done in the past,” Bailey said, citing Questcor’s “rapid expansion of promoting Acthar for approved rheumatology uses.”

The company also made a deal that signaled a move away from its longtime dependence on Acthar—it spent at least $135 million in June for an inflammatory and autoimmune disease drugs from Switzerland-based Novartis AG.

Synacthen and Synacthen Depot are not approved in the United States, but they have been OK’d in more than 40 overseas markets for various conditions.

The Synacthen family gave Questcor “an initial international presence in over three dozen markets,” Bailey said at the time of the deal.

Bailey and Questcor faced some steep challenges from various observers in 2013.

Barron’s published an article in October that called into question the drug maker’s relationship with the Chronic Disease Fund, a large charity that helps patients pay for their prescriptions. The New York Times followed with a similar piece last month.

Acthar has long drawn scrutiny because of its cost—some $30,000 per vial.

Another challenge came from federal authorities. Shares of the company took a hit at the end of October after regulators confirmed they were joining an investigation of Questcor that began more than a year earlier.

Questcor said during its quarterly earnings call that the U.S. Attorney’s office for the Southern District of New York and the L.A. office of the Securities and Exchange Commission joined an investigation into promotional practices for Acthar. Many large pharmaceutical companies have faced similar probes, and Questcor is cooperating with federal authorities.

Analysts generally gave Questcor high marks for its efforts, particularly the diversification plays.

The company also turned up No. 3 on a list of the fastest-growing companies recently published by Fortune magazine. The listing noted that Questcor had a 107%, three-year annual growth rate in earnings per share and a three-year, 85% annual revenue growth rate.

Bailey joined Questcor in 2007 as its interim president and was appointed to his current position later that year.

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