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Questcor Pharmaceuticals Dip Offers Opportunity In Front Of Acthar Script Data

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Questcor Pharmaceuticals (QCOR) shares fell roughly 8% on Friday following an update from Aetna (AET) regarding the insurer's coverage of QCOR's lead product, H.P. Acthar Gel (or Acthar). The update reiterated a prior bulletin that Aetna would only reimburse its patients for Acthar use in the treatment of infantile spasms (IS, or West syndrome), and not for any of the drug's numerous other approved indications. Given that nothing new surfaced in the recent Aetna release, Friday's negative reaction should be seen as temporary, as fundamentals remain solid with no other health insurers negatively changing coverage guidelines since Aetna's initial update in mid-September. In fact, UnitedHealth Group (UNH), which reimburses the largest percentage of Acthar prescriptions, clarified its guidance in early October, stating that key indications for the drug are all deemed "medically necessary" in certain patients.

Visibility on Acthar prescriptions expected soon and could send shares sharply higher. PropThink had an opportunity to speak with Questcor on Friday, and management reiterated that insurance processing of Acthar prescriptions remains as it was before Aetna's bulletin. Each Acthar prescription is reviewed and processed one at a time. QCOR stopped publishing Acthar prescription trends on a monthly basis in October, making it harder, if not impossible, to gauge how the drug is doing in terms of sales and growth. IMS Health, the leader in prescription data, is just gaining access to Acthar prescriptions, as a contractual "block" on data from Curascript is now expiring. Curascript is the sole specialty pharmaceutical supplier that distributes Acthar Gel. As a result, Acthar trends could become visible again later this year or in early 2013 through IMS Health's prescription data. We believe the company is being selective about releasing Acthar prescription trends going forward, with the official word from Questcor that the calendar is not driving them with regard to releasing Acthar script data. Given the company's response, and our belief that

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PropThink is an intelligence service that delivers long and short trading ideas to investors in the healthcare and life sciences sectors. Our Editorial Team is comprised of individuals with a strong background in science, medicine and the business of successfully commercializing therapeutics, medical devices, diagnostics and healthcare services. Our ultimate objective is to leverage the knowledge, experience, and relationships of our contributors to introduce our subscribers to profitable long and short investment opportunities in the healthcare sector. Successfully trading, and investing in emerging growth healthcare companies is a difficult task. Over 90% of drugs never make it out of the clinic. Huge capital requirements along the way result in highly dilutive equity financings often done on the backs of retail investors. At PropThink, we believe that due diligence is the key to success in this industry. We leverage a combined 50 years of experience in science, medicine, legal, regulatory affairs, finance, and operational industry experience to analyze companies at a highly technical level. This detailed analysis and due diligence process defines our editorial strategy and provides our subscribers a high level of confidence in our research. Our focus is on identifying and analyzing technically-complicated companies and equities that are grossly over or under-valued. Visit PropThink.com to see all of our coverage and research, and subscribe to our free newsletter to receive reports, articles, and trading alerts.

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