Shares of Questcor Pharmaceuticals (QCOR) experienced a bear raid Wednesday afternoon around 1:30 p.m. ET. We will analyze the events that triggered the bear raid, which, in our view, reflects no fundamental change in QCOR's business situation.
A Sour Note From Citron
Notorious short selling firm Citron research published a blog post entitled "Questcor -- When things go from bad to worse -- and even worse." The blog post was actually recycled news regarding United Health Group's (UNH) recent policy clarification (PDF) about H.P. Acthar Gel, QCOR's drug that has come under some scrutiny ever since Aetna (AET) revised its reimbursement policies for it.
What's truly laughable about the Citron piece is that, up front, it clearly indicates that the news is old. The blog post starts:
A few weeks ago, another ominous datapoint was disclosed in regard to the status of health insurers' reimbursement policies for clinical use of Questcor's primary drug Acthar. United Healthcare, the largest health carrier in the US, has issued new guidelines for 2013, specifically tightening scrutiny on Acthar, and taking it to the highest of all scrutiny levels
Notice the first four words: A few weeks ago. This is not some new development, but rather, a rehash of old news designed to spook investors who have not been following the QCOR story closely enough.
The document Citron links to in their piece is a prescription drug list and benefit plan summary of changes, which is simply notifying pharmacies that the coverage will somehow be modified. What Cirton does is draw conclusions and use scare tactics to attempt to induce fear. The blog post says:
This is a notification document, not a conditions of coverage document. Conditions of coverage are proprietary to the company, and might or might not be released.
This is completely misleading. Citron
