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The Pharmaceutical Company to Own



June 15, 2012 – Comments (1) | RELATED TICKERS: QCOR.DL , NVS , AMGN

Companies such as Novartis (NYSE: NVS), Amgen (NASDAQ: AMGN), Teva Pharmaceuticals(NYSE: TEVA) and Sanofi (NYSE: SNY) are some of the biggest names in the biopharmaceutical industry. Each of these giants is worth more than $30B and have posted mild declines or mild gains in the one-year movement of their stock price; Amgen leads the pack with a 21.6% increase in its stock price from a year ago. Yet, there is one biopharmaceutical company that has seen its stock price increase 96% from a year ago; this company, with a $2.9B market cap, also posted growth that would put Novartis, Amgen, Teva, and Sanofi to shame.

Questcor Pharmaceuticals (NASDAQ: QCOR) is a biopharmaceutical company that sells two products: H.P. Acthar Gel, which is its flagship product, and Doral, which is used to treat insomnia.  Questcor has been a favorite among mutual funds: its stock has experienced 8 consecutive quarters of increasing mutual fund ownership and it had a 4% YOY increase in mutual fund ownership for its first quarter of 2012. The appeal of Questcor's business is apparent upon closer analysis of the company, but some significant negatives also pop up. So is Questcor a good investment? Full article: here.

1 Comments – Post Your Own

#1) On June 16, 2012 at 2:15 PM, ikkyu2 (98.15) wrote:

Interesting post.  I'm a neurologist and I'd only heard of ACTHar.  Quazepam (Doral) is an interesting drug; I've heard of it now, just read up on it.  It's a sleep aid, competing against generic zolpidem, and it has a 39 hour half life.  The Wikipedia article, clearly mostly drafted by a Questcor PR flack, puts it up against Dalmane and Restoril, two drugs that are hardly used any more.  It makes no mention of quazepam's roofie-like properties, and it doesn't touch the idea of why you'd want a drug with a 39 hour half life for sleep induction - 24 hours after you take the drug, 75% of it is still around in your system?  Really?  If you take a drug at 9 PM for sleep, do you still want to be sleepy at 3PM the next day?  That's clonazepam levels of sleepiness - except they engineered the anti-anxiety and anti-myoclonus effects, for which clonazepam is excellent, right out of quazepam.

ACTHar is a neat drug, and it has two indications: infantile spasms and a kind of rare kidney disease.  The trouble with its use in infantile spasms is that you really want to go from onset to diagnosis to treatment in 24 hours or less - that's proven to improve outcomes - and there is never, never, never any ACTHar in the hospital pharmacy when you need it.  The rep tells me I can call and they'll airlift some to me - but by then I've loaded the kid up with Solu-medrol.

You know who's a real up and comer for large-cap pharma?  Biogen Idec (BIIB).  I was stunned to see that they're big pharma now - they've grown their market cap to $30B+ right now.  I know that I see a *lot* of patients who could be on natalizumab or rituximab and who aren't yet, for one reason or another.  When they say they're raising the standard of care, they're not kidding.

Enjoyed your post - it made me learn something, which to me means it is the best of the best.  I very much appreciate it. 

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