Questcor falls as Citron says FTC investigation looms


Questcor Pharmaceuticals (QCOR -1.9%) slides hard after Citron Research says the FTC is investigating the company's acquisition of Synacthen, a synthetic version of the active ingredient in Acthar.

Full report is here

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Comments (14)
  • 8747S1115R
    , contributor
    Comments (265) | Send Message
     
    Good buying opportunity here. QCOR is way undervalued. Super low P/E ratio. still logging 68% growth Y/Y. only paid out 17% of profits last quarter and has raised dividend 50% in the past year. Recognized as an "everyday hero" just last week by a reputable medical facility. Also only 60Mil shares outstandings. 25% are short. I am LONG!!!!!!
    25 Nov 2013, 12:32 PM Reply Like
  • wam350
    , contributor
    Comments (171) | Send Message
     
    Long and holding
    25 Nov 2013, 01:15 PM Reply Like
  • shakazoid
    , contributor
    Comments (246) | Send Message
     
    These morons and their lies just like muddy waters . Might be time for a new hedge fund client to buy on the cheap
    25 Nov 2013, 01:25 PM Reply Like
  • leopardtrader
    , contributor
    Comments (3676) | Send Message
     
    This is another useless BS by all these people taking advantage of social media to steal from investors instead of working hard to make profitable bets.
    If you read thru the lines you discover plenty caveats with usual disclaimers covered around it. Pretty useless people
    25 Nov 2013, 01:36 PM Reply Like
  • trch3737
    , contributor
    Comments (17) | Send Message
     
    I added "more" QCOR. Watch what happens after the next earnings are announced. It will further exhibit the great management and their 19 indications product running power. Any company as successful as QCOR receives attention of unhappy others. The shorts also look and often gain-up. With QCOR I did due diligence for weeks and I'm very confident of the future, with my top holding, QCOR!
    25 Nov 2013, 01:40 PM Reply Like
  • rjmillerct
    , contributor
    Comments (7) | Send Message
     
    Curious research report by Citron. A fair amount of innuendo, but limited facts. Commenting on a writing suggesting an investigation based upon research reports purporting taking out an overhang issue of a competitor is hardly news. If you examined GE reports on acquisitions over the past twenty years, you would see this in spades (Heller Financial; Antares; etc.) BTW - there are large market drugs in the US where synthetics exists but are not allowed by FDA in US (ex - Premarin). Questionable journalism. Curious if Citron owned a position.
    25 Nov 2013, 03:22 PM Reply Like
  • oneotherfool
    , contributor
    Comments (432) | Send Message
     
    Go back to Oct of 2012, you'll find the previous Citron peace that caused a sell off back then. The stock eventually recovered since then as none of the "risks" they laid out came to fruition. Do they own a position? So they "know" somebody who owns a position? are good questions to ask.
    25 Nov 2013, 06:00 PM Reply Like
  • Challenger71
    , contributor
    Comments (6) | Send Message
     
    Questionable information ??? Earlier comments this year identified Citron Research as a QCOR short seller .... also clicking on the link to the Citron Research report returns:
    Not Found
    The requested URL /wp-content/uploads/20... was not found on this server.
    25 Nov 2013, 03:23 PM Reply Like
  • Bc12852
    , contributor
    Comments (148) | Send Message
     
    Same here. Going to send Citron a Christmas card for giving me the opportunity to buy more shares cheap.
    25 Nov 2013, 03:23 PM Reply Like
  • colt1
    , contributor
    Comments (17) | Send Message
     
    Left should go right to jail, where is the SEC?
    25 Nov 2013, 05:49 PM Reply Like
  • seekingthetrooth
    , contributor
    Comments (854) | Send Message
     
    First off the report is unprofessionally written. Can't imagine someone with 17 years of investing experience can write like a 17 year old.

     

    Second, this is a desperate piece. Which planet is this guy Left from? Doesn't he know that:

     

    1. Rare diseases are treated only with FDA-approved drugs.

     

    2. Rare diseases are classified as those occurring in less than 200k people.

     

    3. FDA-approved drugs for rare diseases are normally given orphan drug status in order to encourage further R&D spend through making it economically attractive for the drug maker.

     

    4. Acthar is an FDA-approved drug for 19 indications which means that physicians cannot deny their patients an alternative FDA treatment i.e. Acthar if all other FDA treatments have failed. Its common sense. No physician would wait for rigorous clinical data while the patient is on death bed or relapsing towards permanent damage. They trust the FDA has done their job well. Plus there is growing body of evidence that Acthar is effective vis-a-vis steroids.

     

    5. Mr. Left thinks a low priced generic will come around. Why hasn't such a generic come around in the last 60 years?

     

    6. One should ask Mr. Left why Novartis, a USD 193 billion market cap giant has given Synacthen rights to Questcor and not gone in themselves? Plus it was either Questcor (with financial muscle) or the the startup (with little to no long-term financial muscle) who appeared committed on losing money for its shareholders by selling a low volume drug for a few 100 dollars where millions are needed for R&D prior to marketing the first vial.

     

    7. Questcor is the only credible candidate to take Synathen to the next level as they've already been through several years of cash burn just to startup Acthar.

     

    8. Even if Synacthen were with a competing drug maker, it would have had to go one indication at a time to get FDA approval with each indication approval process taking several years with no guarantees or successful outcome. No one has an idea how Synthetic Acthar would perform vis-a-vis a naturally extracted Acth.

     

    Such speculative pieces should be immediately dismissed.

     

    The way the bulls and bears are playing the market its either a massive fraud by Questcor about to blowup or the shorts who would be squeezed like there's no tomorrow.

     

    Only time will tell. For me, I'd rather go with the management and not speculative dim wits like Citron and their minions.
    25 Nov 2013, 08:23 PM Reply Like
  • seekingthetrooth
    , contributor
    Comments (854) | Send Message
     
    Further I'd like to add a few points contrary to Citron Research:

     

    1. The rights of the licensee (Questcor) to only develop & market Synacthen and those of licensor (Novartis) to retain the manufacturing of the drug as yet is a non-reportable acquisition event as far as the FTC is concerned.

     

    2. FTC has proposed amendment to the law to bring such acquisitions under the HSR scope of having a pre-approval from FTC prior to consummation of such transactions. A court injunction is issued during the pre-approval process that prevents any legal consummation prior to FTC's decision.

     

    3. The above is still a proposal and has not been ratified by the government. Any ratification will not be retrospective. Given the breakdown in Washington, no one should expect such a proposal to get a pass in the coming few years. The pharma lobby may give additional headwinds to such a proposal.

     

    4. It is not uncommon for FTC to review such events even where no reporting is required. It may strengthen their case to have the law amended with no recourse to the parties to acquisition.

     

    5. FDA 'compassionate cases' have to be pre-approved by FDA given (a) the drug to be tried is investigational and a certain safety & efficacy threshold is reached vis-à-vis the competing FDA-approved treatments, (b) the physician's and patient's consent is in place, (c) the patient doesn't qualify for the subject treatment's clinical trials and (d) all FDA-approved treatments have failed.

     

    Synacthen is no where near such a threshold and has recently been initiated as investigational.

     

    Short-sellers are looking at the wrong place. They should instead focus on MLMs that even though 'appear' to be non-compliant with FTCs definition of a pyramid scheme but nonetheless have a huge risk of becoming one.
    25 Nov 2013, 11:02 PM Reply Like
  • loufah
    , contributor
    Comments (307) | Send Message
     
    Despite the fact that (a) there has been little effort to bring Synacthen to the US prior to Questcor's purchase of the rights, and (b) the FTC isn't required to review acquisitions like this, there is nevertheless the fact (if one can believe Capital Forum) that the FTC has opened an investigation into Questcor's deal, and that it's at the behest of a high-ranking legislator.

     

    If the past is any indication, this won't be acknowledged by the company until the next earnings release, so investors may be twisting in the wind for awhile.

     

    I understand Citron's motivation - it's safe to believe they're short and will do anything within the law to get the stock price down - but we instead need to look at what the possible penalties to Questcor can be and what its stock price will be as a result. Would appreciate if the more experienced pharma investors here can comment on that.
    26 Nov 2013, 05:02 AM Reply Like
  • seekingthetrooth
    , contributor
    Comments (854) | Send Message
     
    Its a legal issue. I just read that the FTC now requires licensees and licensor to report non-exclusive patent transfers that have commercially-significant value to the licensee for antitrust review. This comes into effect 16-Dec-2013. Prior to this, non-exclusivity was not required to be reported.

     

    Questcor and Novartis entered into a non-exclusive agreement in June 2013, prior to the ' yet to be effected' expanded rule above. The License Agreement and the Asset Transfer Agreement as per June 2013 10-Q report are non-exclusive transfers with Novartis retaining certain rights to Synacthen and its compounds, both for manufacturing and marketing. Given the timing and non-exclusivity, I don't think their consummated agreement will be contested as it is deemed non-reportable according to the FTC.

     

    If FTC is investigating at the behest of a Senator then that is just done to keep busy and to build the body of evidence of anti-competitive behavior prevalent in the pharmaceutical industry.

     

    Worse off the fed agencies like Citron and short-sellers will scorn Questcor for 'overpricing', engaging in 'anti-competitive' moves and 'bilking' the healthcare system of millions of $s for a drug once sold cheap. All in all done without violating any laws.
    26 Nov 2013, 05:35 AM Reply Like
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