Seeking Alpha

Questcor falls; Citron claims Acthar at risk of being pulled

  • Though Questcor (QCOR -6.5%) claims the hormone corticotropin (ACTH) is "believed" to be the primary active ingredient in its Acthar gel, lab tests of at least two separate Acthar batches turned up "almost no detectable ACTH," says Citron Research in a new 24-page report (.pdf).
  • Citron, which has published portions of the lab's findings (tests are ongoing), says the test results have been submitted to the FDA. The firm notes Questcor's manufacturing chief/CTO is being transitioned to a "non-executive advisory role," and that the company has been cryptic about Acthar's precise composition (referring to it as a "trade secret").
  • The firm argues the findings put Acthar at risk of being pulled by the FDA. Shares are adding to the post-earnings losses they saw yesterday.
  • Citron's prior Questcor commentary
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Comments (58)
  • Quoth the Raven
    , contributor
    Comments (2101) | Send Message
     
    Sounds about right. QCOR is a house of cards built on a $100k "dream drug". Reality due to set in eventually for this company.
    27 Feb 2014, 10:32 AM Reply Like
  • ztnjpv
    , contributor
    Comments (55) | Send Message
     
    What sounds right? The fact that it's negative? You have no credible thesis. Just fear and innuendo.
    27 Feb 2014, 10:39 AM Reply Like
  • monkey see
    , contributor
    Comments (619) | Send Message
     
    Maybe, your dream will become a shorts nightmare. I forgot, it already has.
    27 Feb 2014, 10:39 AM Reply Like
  • Michael Kline
    , contributor
    Comments (387) | Send Message
     
    QTR an Citron have never been right on QCOR! Funny ,the timing of these two articles comes after the stock had gained 30 points! Maximizing the shorts position?
    27 Feb 2014, 01:35 PM Reply Like
  • Michael Kline
    , contributor
    Comments (387) | Send Message
     
    Reality? I think it's time management steps in an answers these allegations ! They know the truth ,thus this ping pong game needs to stop! Serious margin calls are effecting the small investors! Citron an QTR need to be held responsible as truthful or irresponsible! So where's management? No other Corporations put up with this garbage!
    27 Feb 2014, 03:05 PM Reply Like
  • steven russo
    , contributor
    Comments (188) | Send Message
     
    Quoth nobody is fooled by your articles blabbering about nothing. OH LETS COPY AND PASTE CITRONS REPORT into your own article and try to seem smart. You know nothing more than Citron does and are just looking to make a quick buck because you know everyone in QCOR has seen a 50% run over the past couple months. Obviously they will be more likely to sell. I think Citron probably had a huge short position and realized after earnings that the stock wasn't going to come down enough. Now they publish this and cover their short while theres supply on the market because they knew they would never be able to cover without driving price way up. Did you see price action yesterday after earnings? it was so bouncy, to me it looked clearly like supply of sellers was low and stop loss orders were being filled quickly just to cover for shorts. When Citron realized they wouldnt be able to cover without driving price way up they resort to this junk.
    27 Feb 2014, 04:00 PM Reply Like
  • MichaelJ8
    , contributor
    Comments (699) | Send Message
     
    yes... it is never coincidence...
    27 Feb 2014, 06:51 PM Reply Like
  • Ernest P Icahn
    , contributor
    Comments (378) | Send Message
     
    Don't worry the Shorts got themselves trapped with the pps going from $17 to $80. They can't wait to cover, just like 17.5 million did last year. lol
    28 Feb 2014, 11:51 AM Reply Like
  • Scoobster
    , contributor
    Comments (8) | Send Message
     
    There is no business reason for QCOR to respond. Responding gives these guys credibility and puts them on the map. The FDA has already pronounced on this and it is the entity that matters, not someone who can research selective its of info to support a short position that was in trouble. According to the FDA QCOR is doing fine. The shorts try to play dirty to get their short term dive in the stock. They then buy it and have made their money while laughing at holders of the stock for paying attention to them. The shorts are investors not scientists.
    2 Mar 2014, 10:06 PM Reply Like
  • monkey see
    , contributor
    Comments (619) | Send Message
     
    Won't reveal the laboratory. Won't reveal the lawyer. Won't reveal the truth. Typical Citron.
    27 Feb 2014, 10:37 AM Reply Like
  • trch3737
    , contributor
    Comments (15) | Send Message
     
    Who paid for it? What is Citron's short position? Alpha.com should require disclosure of Citron's short QCOR short position, and then clean their house.
    27 Feb 2014, 11:23 AM Reply Like
  • steven russo
    , contributor
    Comments (188) | Send Message
     
    This makes me LAUGH OUT LOUD. Citron published negative reports last year and the stock dropped from 58 to the 20's. They probably made a killing shorting the stock. They think the same thing will happen after a 20 to 75 run in the stock. Numbers don't lie Jack and they pulled in close to 500 Million over the past 6 months, raised their dividend and bought back close to 1 million shares. Management hired a strategic team to create long term shareholder value. FDA approval for Acthar gel has been around forever and guess what IT WORKS! Do you think the FDA will give any credibility to an analyst firm trying to make a quick buck off shorting a stock? GIVE ME A BREAK this drug saves lives!!!!
    27 Feb 2014, 10:40 AM Reply Like
  • libertyfree
    , contributor
    Comments (32) | Send Message
     
    The drug is a "placebo". Only witch doctors recruited by QCOR have been prescribing it for patients and hypnotize them to believe it works.
    27 Feb 2014, 11:27 AM Reply Like
  • konihug
    , contributor
    Comments (65) | Send Message
     
    Sounds good! I hope you're wrong, but last time I commented about QCOR, I drew some very hot comments, so I shut up this time and just enjoy reading the comments section. I just wonder why there is such a fierce debate about this company and it's one and only drug. When there is so much smoke, might there be a little fire, too?
    27 Feb 2014, 12:05 PM Reply Like
  • steven russo
    , contributor
    Comments (188) | Send Message
     
    oh right and we believe you...........
    27 Feb 2014, 03:13 PM Reply Like
  • The Highwayman
    , contributor
    Comments (67) | Send Message
     
    3000 doctors prescribed Acthar over the last year - that is from the last CC. So, in short, you're completely wrong.
    27 Feb 2014, 04:43 PM Reply Like
  • surferdan
    , contributor
    Comments (16) | Send Message
     
    Does Seeking Alpha have no shame?
    27 Feb 2014, 10:42 AM Reply Like
  • ajlewis
    , contributor
    Comments (12) | Send Message
     
    I don't think your comment is fair to SA. I have always found articles on both sides of the debate posted on whatever stock I was researching. I also wonder why you follow SA if you think it's a "Gestapo" site.
    27 Feb 2014, 01:54 PM Reply Like
  • Kboyd78
    , contributor
    Comments (159) | Send Message
     
    I say this because I have had a string of normal comments deleted because I differed either with the author of the article or another comment. I think deleting comments is a form of censorship hence the "Gestapo" monicker. I would caution you and everyone to be skeptical on this and all stock sites.
    27 Feb 2014, 02:25 PM Reply Like
  • ajlewis
    , contributor
    Comments (12) | Send Message
     
    I do, as you suggest, approach all investing sites and commentators with a healthy bit of skepticism. As with other postings about Questcor, however, much of what I read appears to be an on-going battle between the longs and shorts which is based more on speculation, rather than facts. Just a few examples:

     

    Assertion - the response to ACTH is just a placebo effect.

     

    Fact - the placebo effect can only be produced as an outcome of (erroneous) analytic thought (consult a cognitive psychology text). In the use for the treatment of infantile spasms, as an example, a placebo effect isn't possible because the patient is not yet capable of analytic thought.

     

    Assertion - a drug this good couldn't possibly be picked up for $100K.

     

    Historical facts - ACTH was first obtained in 1948 by Mayo Clinic. scientists (studying rheumatoid arthritis) from the Amour Packing Co., which was investigating by-product development from pig slaughter. A problem found was that the 1/2 life of ACTH in blood was only 10 minutes. In 1952, Amour got FDA approval to made Acthar gel, which is a slow release, injectable form of ACTH.

     

    The rights to the drug were then obtained by Rhone-Poulenc. In 1995 the FDA cited the company for numerous safety issues at its manufacturing facility. Rather than make the necessary upgrades,
    R-P ceased production. After a merger, R-P became Adventis. As a result of patient demand, Adventis agreed to a limited production to support treatment for IS and exacerbated cases of M.S. only. By 2001, they were losing several million dollars/yr. on sales of 1/2 million. Thus, they were happy to sell the rights to Acthar for 100 K plus a % royalty on sales over 10 million.

     

    Assertion - Because Questcor doesn't have a patent on ACTH it is at risk from someone who might synthesize it and drain their moat.

     

    Fact - The 39 unit amino acid sequence of ACTH has been known since 1960. The problem is, however that this is only the primary structure of the molecule. Polypeptides also have a secondary structure (which is often a helix), which is then folded into a tertiary, 3-dimensional structure. So far no one has yet been able to induce the formation of the 3-D aspects of the molecule, which is necessary for complementary configuration with membrane binding sites. The closest anyone has been able to come is with two 24 amino acid analogs, known as Synacthen, which are not as efficacious as ACTH.

     

    There are other assertions that have been made that don't seem to be supported by fact but, for now, I'll just say "enough". Thanks for your reply.

     

    Disclosure: I have a B.S. in biology from the U. of WI and a Ph.D. from Rutgers. I recently retired after 41 years as a college biology professor. I'm long on QCOR.
    27 Feb 2014, 04:27 PM Reply Like
  • dindin21
    , contributor
    Comments (50) | Send Message
     
    Great FACTUAL response.
    27 Feb 2014, 09:07 PM Reply Like
  • User17576362
    , contributor
    Comments (16) | Send Message
     
    I have had the same issue with a number of my comments being deleted, basically for disagreeing with the commenter or the author.
    27 Feb 2014, 09:30 PM Reply Like
  • ztnjpv
    , contributor
    Comments (55) | Send Message
     
    I am genuinely and sincerely amazed that Citron has any influence left on the price action of QCOR. For all the volatility and price drops Citron has caused QCOR's stock in past few years, NOTHING (zilch! nada! NICHTS! NIENTE!!) that Citron has claimed or implied or warned about has come to pass. NOTHING!! Yet they keep putting out these "timely" reports and traders and investors are actually influenced by them.

     

    This is the Boy who cried Wolf only there is no wolf, nor has there ever been nor will be. It's just amazing that Citron has any cred with anyone outside short sellers are predisposed to believing anything that might cause a price drop.
    27 Feb 2014, 10:44 AM Reply Like
  • dieuwer
    , contributor
    Comments (2526) | Send Message
     
    When is Citron finally going to be sued for illegal stock price manipulation?
    27 Feb 2014, 10:49 AM Reply Like
  • ztnjpv
    , contributor
    Comments (55) | Send Message
     
    THAT would be true justice.
    27 Feb 2014, 10:56 AM Reply Like
  • Lucierja
    , contributor
    Comments (181) | Send Message
     
    The real threat to QCOR is an independent lab finding out what ingredient in ACTHAR does work. If that is discovered generic versions will drive down its value. Since this is a negative finding, QCORs "trade secret" is still safe. Can't blame them for trying, but CITRON failed.
    27 Feb 2014, 10:51 AM Reply Like
  • TruffelPig
    , contributor
    Comments (4097) | Send Message
     
    It is not that simple. If the active ingredient is not Corticotropin, the FDA approval is void.
    27 Feb 2014, 11:23 AM Reply Like
  • Kboyd78
    , contributor
    Comments (159) | Send Message
     
    Guys it's a game. Sell when sentiment shifts. I sold at 76. I'll wait for citron to have its fun and knock it down to 55 or so and then ill re-enter the stock. Great way to make money. Don't swim against the tide.
    27 Feb 2014, 10:53 AM Reply Like
  • libertyfree
    , contributor
    Comments (32) | Send Message
     
    I doubt you will get it at 55. Majority of the shares are now owned by institutions and they don't panic easily.They really do their own diligence.
    27 Feb 2014, 11:31 AM Reply Like
  • Kboyd78
    , contributor
    Comments (159) | Send Message
     
    I assure you this will be in the 50's soon. Just buy there rinse lather repeat.
    27 Feb 2014, 11:59 AM Reply Like
  • Kboyd78
    , contributor
    Comments (159) | Send Message
     
    Like I said buy when it gets in the 50's
    28 Feb 2014, 11:17 AM Reply Like
  • dieuwer
    , contributor
    Comments (2526) | Send Message
     
    The statements by Citron could actually be construed as libelous.
    27 Feb 2014, 10:57 AM Reply Like
  • valueone
    , contributor
    Comments (16) | Send Message
     
    Blackrock, Vanguard, and other big boys are buying; so am I
    27 Feb 2014, 11:44 AM Reply Like
  • Kay Herbert
    , contributor
    Comments (1008) | Send Message
     
    Sounds like they are selling a very expensive placebo?
    27 Feb 2014, 12:18 PM Reply Like
  • PeterScriabin
    , contributor
    Comments (240) | Send Message
     
    Brilliant insight, Herbie. And 65-70% of the toughest refractory and relapsing patients are so gullible that the placebo makes them well.
    27 Feb 2014, 01:13 PM Reply Like
  • troul
    , contributor
    Comments (13) | Send Message
     
    How many stocks have we seen tumble within a week long period after Citron publishes a negative publicity article? Their thesis behind most arguments has no real foundation and they clearly are using them to manipulate stock prices. It's pathetic and undeserved that they are able to take advantage of market psychology the way they have.
    27 Feb 2014, 01:42 PM Reply Like
  • ztnjpv
    , contributor
    Comments (55) | Send Message
     
    It should be criminal
    1 Mar 2014, 03:02 PM Reply Like
  • Bunny Junior
    , contributor
    Comments (50) | Send Message
     
    There is definitely a scam going on. Time for the SEC to do their job and ban Citron from the securities industry. I am looking forward to the upcoming episode of 'American Greed' featuring Andrew Left. Why anyone listens to this fool who is blatantly manipulating stock for his own profit by putting out bogus reports and has a track record of being 100% wrong. This really is getting ridiculous.
    27 Feb 2014, 02:25 PM Reply Like
  • ztnjpv
    , contributor
    Comments (55) | Send Message
     
    Yes. it is.

     

    From the bottom of my heart, I really don't understand why anyone takes him seriously.

     

    People go on TV all the time insisting we're on the brink of financial catastrophe but I don't see the market tanking every other day. Left is a phony. Why do people take him seriously??
    1 Mar 2014, 03:05 PM Reply Like
  • physdude
    , contributor
    Comments (118) | Send Message
     
    He is great at propaganda (specifically stimulating the amygdala with scary looking nonsense).
    1 Mar 2014, 07:55 PM Reply Like
  • chinky investor
    , contributor
    Comments (9) | Send Message
     
    Citron is not regulated by the SEC and Andy Left is already banned by them for stock manipulation.
    27 Feb 2014, 02:44 PM Reply Like
  • chinky investor
    , contributor
    Comments (9) | Send Message
     
    Oh in case you don't believe me,he worked with me in a boiler room many moons ago and admits it in his Bio
    27 Feb 2014, 02:46 PM Reply Like
  • Bunny Junior
    , contributor
    Comments (50) | Send Message
     
    Then why is he not in jail for this crap?
    27 Feb 2014, 02:47 PM Reply Like
  • traderhoe
    , contributor
    Comment (1) | Send Message
     
    Here is where they got their so called chromatograms.. http://bit.ly/1pAx3HK

     

    Why not just show the real ones. I call bs. They are saying all the way about being up front and truthful. What would be the harm in publishing some actual documents from the lab results... Makes no sense. I'll be laughing my ass off when this is over selling all the shares I am buying at these discounts.
    27 Feb 2014, 08:44 PM Reply Like
  • physdude
    , contributor
    Comments (118) | Send Message
     
    Wow, that is mind blowing - how come there are no more likes for your comment??

     

    Using a set of graphs from a 2 year old publication in Nature having nothing to do with Questcor or Acthar in their report is extraordinary! Of course, they covered themselves with "nearly all of which are of the form of these generic samples" - classic FUD at its best.
    27 Feb 2014, 11:32 PM Reply Like
  • John Stiles
    , contributor
    Comments (16) | Send Message
     
    Everyone should understand who Andrew Left is. Per Shareholders United he has his own ajenda as indicated by the following:

     

    Citron Research is a one-man show run by Mr. Andrew Left, whose fraudulent career began with a huge black mark. In 1998, in his first job, Mr. Left was found by the National Futures Association to have: “MADE FALSE AND MISLEADING STATEMENTS TO CHEAT, DEFRAUD OR DECEIVE A CUSTOMER IN VIOLATION OF NFA COMPLIANCE RULES 2-2(a) AND 2-29(a)(1). ” Mr. Left was debarred for three years, among other punishments. This finding can be found on the website of the National Futures Association.
    After being debarred, Mr. Left was employed as the President & CEO of Detour Media in 1999. But in February 2002, his company sued him for stealing six checks worth about $25,000. In Detour Media’s official SEC filing, the company alleged Mr. Left’s “fraud and deceit, negligent misrepresentation, breach of fiduciary duty and unlawful monetary conversion.” This legal paperwork, as well as the final judgment (Mr. Left had to pay $26,445.22) can be found on Court orders Mr. Left to pay $26,445.62 for lawsuit (fraud and deceit).
    In 2005, Mr. Left founded http://bit.ly/1pADV7V, a predecessor to http://bit.ly/q8jCf0. On this website, he slammed a company called WHIS, and one of WHIS’s principals, Mr. Salim Rana. He fabricated information about Mr. Rana (calling him a thief who steal from the elderly), and Mr. Rana sued Mr. Left for libel. Mr. Left failed to comply with the court’s order for discovery. As a result, the court issued a judgment, ordering Mr. Left to pay Mr. Rana $2,500,000 for damages. The documents can be found here: Court orders Mr. Left to pay $2,500,805.64 for lawsuit (libel)
    In 2010, Mr. Left again ran into trouble with the law, in an altercation with a businessman. He was arrested in Florida. In addition, the records show that he was charged for “failing to appear.” His arrest record, along with his mug shot, can be found here.
    One has to wonder why an investor would trust the investment advice of someone with a record of fraud, deceit, and unlawful behavior.
    27 Feb 2014, 09:15 PM Reply Like
  • dieuwer
    , contributor
    Comments (2526) | Send Message
     
    One has to wonder with such a record why Mr. Left is not spending his time with Madoff in jail.
    27 Feb 2014, 10:18 PM Reply Like
  • smitsky
    , contributor
    Comments (212) | Send Message
     
    Let's see if I understand this correctly. This guy basically says something negative about QCOR today and traders had the stock down 8 points intraday? What a pathetic situation! Ridiculous stock-price manipulation if you ask me (see my other comment).
    27 Feb 2014, 10:25 PM Reply Like
  • ajlewis
    , contributor
    Comments (12) | Send Message
     
    John,

     

    thanks for your research and the information you provide on Mr. Left's resume. I think it provides an important context for evaluating the validity of the recently recently released, Citron report on Qcor.
    28 Feb 2014, 01:20 PM Reply Like
  • smitsky
    , contributor
    Comments (212) | Send Message
     
    I'm going to re-post my comment I made in the other QCOR article here on SA because it's relevant:

     

    You know, I can't say I've seen anything quite like this. I can't believe these traders had QCOR down about 8 points at one point today. This is major manipulation.

     

    I got in the stock right above the breakout level of ~75. Rode it up for a few points. All was well and good. Decided to stay in for earnings.

     

    Now, can someone come on here and say that the earnings report was that bad? I am capitalizing the word That here. I'll tell you why I know it wasn't. The price action didn't show it. The stock actually rose a bit. It did not gap down.

     

    You mean to tell me that this issue couldn't stabilize today like it - or any other reasonably-acting issue should have? I sensed it was headed for trouble when I was down 8% at 71. I took my loss and moved on. But then they had it down around 65? No Man. Something is wrong. There is no call for this. Utter nonsense. Shorts manipulating it? I guess so. This is ridiculous. Wow!
    27 Feb 2014, 09:23 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4097) | Send Message
     
    Usually this religious fighting of longs versus shorts goes on for a while and then it makes booooommmmmmm. Could be down or up. There are still ongoing investigations in the marketing practices as far as I know which makes this a non-touchable for me as a long. A bit too hot.

     

    My question is: why today, one day after earnings release? Did that have something to do with black-out period and then not anymore? The date of the release is certainly no coincidence and I think that it is deeper than just jumping on the stock after a somewhat disappointing earnings report. But who knows, it is all speculation.
    27 Feb 2014, 09:36 PM Reply Like
  • peterglit
    , contributor
    Comments (6) | Send Message
     
    What do the patients say,are they satisfied using ACHTAR ?

     

    I´m from Denmark,having 273 Questcor stocks.
    27 Feb 2014, 10:15 PM Reply Like
  • Zweben
    , contributor
    Comment (1) | Send Message
     
    Remember Citron makes money by lies and fear.
    28 Feb 2014, 01:41 AM Reply Like
  • Ernest P Icahn
    , contributor
    Comments (378) | Send Message
     
    Kill the drug and put poor suffering inflicted people on life-long dialysis and/or make them get kidney transplants. -Think like Shorty Obamacare Death Squads.
    28 Feb 2014, 11:44 AM Reply Like
  • physdude
    , contributor
    Comments (118) | Send Message
     
    Where did they publish results of the tests?? All I saw were some graphs from a 2 year old Nature publication.
    1 Mar 2014, 07:56 PM Reply Like
  • Scoobster
    , contributor
    Comments (8) | Send Message
     
    I sure hope this guy didn't short QCOR!
    9 Apr 2014, 11:22 AM Reply Like
  • WilliamMarkClarke
    , contributor
    Comments (2) | Send Message
     
    Good morning, good day and or evening,

     

    A few years ago a friend of mine had a son here in Las Vegas.He had infantile spasms. A doctor proscribed him “Acthar”. She was taught how to give her son a shot everyday. This was about 3 months. On more then 2 occasions I had to pick up a bottle of “Acthar” so she was able to stop the infantile spasms. It worked. Since that time the company has “tracked” him for almost 4 years. The child has been “lab rated” by the company.

     

    I think the child was given a minimum of one shot a day. She figured it cost $23,500 a shot. She figured the whole bottle cost $500,000. It was a “Orphan Drug.”.As I recall she used 3 bottles. Now she has learned that “Acthar” was only a small percentage and was filled with “other stuff”. Yet the FDA let the company “give” it out.

     

    Something is seriously wrong. How say you all?
    29 Apr 2014, 04:49 AM Reply Like
  • physdude
    , contributor
    Comments (118) | Send Message
     
    Your statement is full of inaccuracies. It doesn't cost $23,500/shot but $23,500/vial (closer to $30,000/vial now) which is a very different thing. Further, the only one who is claiming that it is contaminated or misrepresented is Citron who didn't release the lab report or who did it or the chain of custody. Hence, there is no way for you to know whether it was filled with "other stuff" and the FDA doesn't definitely think so given that they have effectively ignored the Citron report. Further, all batches are independently and externally tested by a different firm (CSL Behring I think) so anything odd would have been picked up ages ago.

     

    It would be best if you could stick to actual facts.
    29 Apr 2014, 05:30 AM Reply Like
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