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Questcor (QCOR +8.3%) gets a bump up from an upgrade to Buy at Suntrust this morning. The firm...

Questcor (QCOR +8.3%) gets a bump up from an upgrade to Buy at Suntrust this morning. The firm notes that revenue from its nephrotic syndrome treatment is running far better than expected, and with new additions to its sales team it should easily Street script estimates.
Comments (2)
  • Just trying to avoid eating catfood in retirement.
    9 Aug 2012, 06:04 PM Reply Like
  • I know a lot of people have speculated that QCOR is a potential takeover target. Curious to know what management's philosophy is on the subject, as they have bought back shares in the past and only recently sold off some during the July 10 rally. Anyone read or see anything on the subject, and whether the company would agree to something like that? I'm long on QCOR myself and actually purchased a coupla hundred more shares last month during the low period - seemed like too good of a deal to pass up.

     

    At the product's current price, I agree that the ability to produce a generic substitute is compelling, but no one has done it yet, indicating a significant barrier to entry to the formulation process. Regardless of whether a competitive product is launched, customers still will have their preferences. Remember, we're talking about people's lives here, and people are going to pay the price if it means improved quality of life. Drugs are tricky because they affect people in different ways; a competing product will only likely attract a portion of the market for whom the existing drug did not help. Sure, price plays a big factor - no doubt - but a drug like this is not carbonated soda or fabric softener. Users aren't going to be as fickle. They'll be cautious to change, and QCOR will also defend their rights to sell the products to their customers. Users should not have to make sacrifices on their quality of health just because a cheaper and less effective or "different performing" drug is available. It might be off patent, but it's still unique and proprietary AND they have the market share. They won't let that go without a fight.

     

    Anyone that's ever sold pharmaceuticals in the past will know how difficult it is to get physicians to listen to you, and then to actually prescribe a drug as well is almost impossible. That means the campaign to launch a substitute will also have to be significant - the money any wanna be competitor will need to spend will be in the millions just to undo the market share that QCOR already has. That's AFTER approvals of the new drug. Any kind of threat to this company is years away, and by then, QCOR will be able to move it's focus into some of the other potential markets.

     

    To this last point, this is actually more of a threat to QCOR because these new markets are virgin territory for everyone. It would make more sense to a competitor to seek approval for one of their other markets - which again raises the possibility of takeover for a bigger pharma. Another company can buy up QCOR and capture massive share instantly with the right marketing strategy and secure a significant portion of business which again puts up big barriers to newcomers.
    9 Aug 2012, 06:06 PM Reply Like
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