QUESTCOR PHARMACEUTICALS INC - FORM 8-K - EX-99.1 - PRESENTATION MADE BY QUESTCOR PHARMACEUTICALS, INC.

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8-K - FORM 8-K - QUESTCOR PHARMACEUTICALS INC	d387415d8k.htm

July 31, 2012

NASDAQ:

QCOR

NASDAQ:

QCOR

Exhibit 99.1

Safe Harbor Statement

Note: Except for the historical information contained herein, this press release contains forward-looking statements that

have been made pursuant to the Private Securities Litigation Reform Act of 1995. These statements relate to future events

or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as

"believes," "continue," "could," "estimates," "expects," "growth," "may," "plans," "potential," "should," "substantial" or

"will" or the negative of such terms and other comparable terminology. These statements are only predictions. Actual

events or results may differ materially. Factors that could cause or contribute to such differences include, but are not limited

to, the following: Our reliance on Acthar for substantially all of our net sales and profits; Reductions in vials used per

prescription resulting from changes in treatment regimens by physicians or patient compliance with physician

recommendations; The complex nature of our manufacturing process and the potential for supply disruptions or other

business disruptions; The lack of patent protection for Acthar; and the possible FDA approval and market introduction of

competitive products; Our ability to continue to generate revenue from sales of Acthar to treat on-label indications

associated with NS, and our ability to develop other therapeutic uses for Acthar; Research and development risks, including

risks associated with Questcor's work in the area of NS and potential work in the area of Rheumatology, and our reliance on

third-parties to conduct research and development and the ability of research and development to generate successful

results; Our ability to comply with federal and state regulations, including regulations relating to pharmaceutical sales and

marketing practices; Regulatory changes or other policy actions by governmental authorities and other third parties in

connection with U.S. health care reform or efforts to reduce federal and state government deficits; Our ability to receive

high reimbursement levels from third party payers; An increase in the proportion of our Acthar unit sales comprised of

Medicaid-eligible patients and government entities; Our ability to estimate reserves required for Acthar used by

government entities and Medicaid-eligible patients and the impact that unforeseen invoicing of historical Medicaid

prescriptions may have upon our results; Our ability to effectively manage our growth, including the expansion of our NS

selling effort, and our reliance on key personnel; The impact to our business caused by economic conditions; Our ability to

protect our proprietary rights; The risk of product liability lawsuits; Unforeseen business interruptions and security

breaches; Volatility in Questcor's monthly and quarterly Acthar shipments, estimated channel inventory and end-user

demand, as well as volatility in our stock price; and Other risks discussed in Questcor's annual report on Form 10-K for the

year ended December 31, 2011 as filed with the Securities and Exchange Commission, or SEC, on February 22, 2012, and

other documents filed with the SEC.

The risk factors and other information contained in these documents should be considered in evaluating Questcor's

prospects and future financial performance.

A biopharmaceutical company whose

product, Acthar, helps patients with serious,

difficult-to-treat medical conditions

A biopharmaceutical company whose

product, Acthar, helps patients with serious,

difficult-to-treat medical conditions

Questcor

Flagship Product:

•

Profitable, cash flow positive, $135M** in cash, debt-free

•

Profitable, cash flow positive, $135M** in cash, debt-free

•

19 approved indications

•

19 approved indications

Key Markets*:

•

Nephrotic Syndrome, Multiple Sclerosis, Infantile Spasms

•

Several billion dollar market opportunity

•

Nephrotic Syndrome, Multiple Sclerosis, Infantile Spasms

•

Several billion dollar market opportunity

Strategy:

•

Grow Acthar sales in each key market

•

Developing Rheumatology and other on-label markets

•

Grow Acthar sales in each key market

•

Developing Rheumatology and other on-label markets

Financials:

*In

this

presentation,

the

terms

“Nephrotic

Syndrome,”

“Multiple

Sclerosis,”

and

“Infantile

Spasms,”

and

their

abbreviations,

refer

the

on-label

indications

for

Acthar

associated

with

such

conditions.

Investors

should

refer

the

FDA

approved

Acthar

label,

which

can

found

http://www.acthar.com/files/Acthar-PI.pdf

**As

7/27/12

Questcor Overview

•

314 paid NS scripts

•

1,110 paid MS scripts

–

Up 48% YOY

•

96 paid IS scripts

•

Record financial performance

–

4,710 vials shipped, up 94% YOY

–

$112.5M in net sales, up 145% YOY

–

$0.65 GAAP EPS (diluted), up 210% YOY

•

314 paid NS scripts

•

1,110 paid MS scripts

–

Up 48% YOY

•

96 paid IS scripts

•

Record financial performance

–

4,710 vials shipped, up 94% YOY

–

$112.5M in net sales, up 145% YOY

–

$0.65 GAAP EPS (diluted), up 210% YOY

Strong Second Quarter Results

Q2 –

2012

Q2 –

2011

Net Sales ($M)

$112.5

$46.0

Gross Margin

94%

Operating Income ($M)

$61.0

$20.4

Fully Diluted, GAAP EPS

$0.65

$0.21

Q2-2012 Financial Results

•

Second quarter vials shipped: 4,710

•

Second quarter cash flow from operations: $43.2M

•

Channel inventory estimated to be within the normal range

•

Medicaid reserves continue to appear adequate

•

3,730,069 shares repurchased during Q2-2012

•

Second quarter vials shipped: 4,710

•

Second quarter cash flow from operations: $43.2M

•

Channel inventory estimated to be within the normal range

•

Medicaid reserves continue to appear adequate

•

3,730,069 shares repurchased during Q2-2012

Record Net Sales (up 145%) and Solid Earnings (EPS up 210%)

Growth in Shipped Vials

Questcor Strategy -

Pursue Acthar Markets

Nephrotic Syndrome (NS)

Multiple Sclerosis (MS)

Infantile Spasms (IS)

Rheumatology

•

Characterized by excessive spilling of protein

from the kidneys into the urine (proteinuria)

•

Can result in end-stage renal disease (ESRD),

dialysis, transplant

•

Acthar is approved “to induce a diuresis or a

remission of proteinuria in the nephrotic syndrome

without uremia of the idiopathic type or that due to

lupus erythematosus”

•

Significant unmet need

–

Few treatment options

–

Goal of therapy is the significant reduction

of proteinuria

•

Characterized by excessive spilling of protein

from the kidneys into the urine (proteinuria)

•

Can result in end-stage renal disease (ESRD),

dialysis, transplant

•

Acthar is approved “to induce a diuresis or a

remission of proteinuria in the nephrotic syndrome

without uremia of the idiopathic type or that due to

lupus erythematosus”

•

Significant unmet need

–

Few treatment options

–

Goal of therapy is the significant reduction

of proteinuria

Acthar and Nephrotic Syndrome (NS)

NS Scripts-Strong Continued Growth

Paid Rxs

Notes: Historical trend information is not necessarily indicative of future results. Chart includes "Related Conditions" - diagnoses that

are either alternative descriptions of the condition or are closely related to the medical condition which is the focus of the chart.

Yellow numbers in the bars show the number of NS sales

representatives making calls for the majority of the quarter. Q3 ‘11 and

Q2 ‘12 included expansion and training of new sales people.

Neurodegenerative disorder

Acute treatment for relapses

Neurodegenerative disorder

Acute treatment for relapses

Acthar and Multiple Sclerosis (MS)

Potential

target for

*Nickerson,

(2011)

ACTHAR is approved for MS exacerbations, without reference to first line or second line use but is generally positioned as

second

line

matter

marketing

strategy.

See

http://www.acthar.com/files/Acthar-PI.pdf

for

specific

label

information.

43% get better or

much better

27% get only a

little better

30% stay the same

or get worse

Notes: Historical trend information is not necessarily indicative of future results. Acthar is marketed for the on-label indication of MS

exacerbations in adults, though the chart includes "Related Conditions" -

diagnoses that are either alternative descriptions of the condition or

are closely related to the medical condition which is the focus of the chart. About 5% of the prescriptions in the tables are for related conditions.

Yellow numbers in the bars show the number of MS sales representatives making calls for the majority of the quarter.

Notes: Historical trend information is not necessarily indicative of future results. Acthar is marketed for the on-label indication of MS

exacerbations in adults, though the chart includes "Related Conditions" -

diagnoses that are either alternative descriptions of the condition or

are closely related to the medical condition which is the focus of the chart. About 5% of the prescriptions in the tables are for related conditions.

Yellow numbers in the bars show the number of MS sales representatives making calls for the majority of the quarter.

MS Scripts-Record of Consistent Growth

Paid Rxs

•

Devastating, refractory form of childhood epilepsy

•

Unsuccessful treatment may leave infant with

permanent developmental disabilities

•

Ultra-rare orphan disorder

•

Acthar currently used to treat 40-50% of IS patients

•

Targeting select institutions

•

Devastating, refractory form of childhood epilepsy

•

Unsuccessful treatment may leave infant with

permanent developmental disabilities

•

Ultra-rare orphan disorder

•

Acthar currently used to treat 40-50% of IS patients

•

Targeting select institutions

Acthar and Infantile Spasms (IS)

•

4 key indications on the Acthar label*

–

Polymyositis/Dermatomyositis (PM/DM)

–

Systemic lupus erythematosus (Lupus)

–

Psoriatic arthritis

–

Rheumatoid arthritis

•

High unmet need; difficult to treat

•

Serious health risk if unsuccessfully treated

•

Significant patient population (multi $B opportunity)

•

4 key indications on the Acthar label*

–

Polymyositis/Dermatomyositis (PM/DM)

–

Systemic lupus erythematosus (Lupus)

–

Psoriatic arthritis

–

Rheumatoid arthritis

•

High unmet need; difficult to treat

•

Serious health risk if unsuccessfully treated

•

Significant patient population (multi $B opportunity)

Rheumatology

*See http://www.acthar.com/files/Acthar-PI.pdf

for specific label information.

Rheumatology: Estimated Patient Populations*

*Questcor estimates

Indication

Total Estimated

US Population

Estimated Target

Acthar

Population

Dermatomyositis/Polymyositis

66K

~26K

Systemic Lupus Erythematosus

250K

~50K-100K

Rheumatoid Arthritis

1.3M

~50K

Psoriatic Arthritis

500K

~40K

Juvenile Rheumatoid Arthritis

300K

How Does Acthar Work?

•

Acthar treats autoimmune conditions across a variety of organ systems (CNS,

kidney, etc.)

•

Acthar appears to modulate the immune system and associated inflammatory

response through binding to melanocortin receptors

•

The primary melanocortin peptide (ACTH) in Acthar binds to all 5

melanocortin receptors (MCR1-5); other active peptides are in Acthar as well

–

Indirect effect: Acthar triggers the production of cortisol and

other adrenal

compounds through binding to MCR2 receptors

–

Direct effect: Acthar acts directly at the cellular level by binding to melanocortin

receptors on immune cells and cells in the targeted tissues (e.g., kidney podocytes)

•

All the active ingredients of Acthar have yet to be fully characterized and the

mechanism of action and pharmacokinetic profile of Acthar are not fully known

•

Acthar treats autoimmune conditions across a variety of organ systems (CNS,

kidney, etc.)

•

Acthar appears to modulate the immune system and associated inflammatory

response through binding to melanocortin receptors

•

The primary melanocortin peptide (ACTH) in Acthar binds to all 5

melanocortin receptors (MCR1-5); other active peptides are in Acthar as well

–

Indirect effect: Acthar triggers the production of cortisol and

other adrenal

compounds through binding to MCR2 receptors

–

Direct effect: Acthar acts directly at the cellular level by binding to melanocortin

receptors on immune cells and cells in the targeted tissues (e.g., kidney podocytes)

•

All the active ingredients of Acthar have yet to be fully characterized and the

mechanism of action and pharmacokinetic profile of Acthar are not fully known

•

Difficult/impossible to reverse engineer ACTHAR

–

Not well characterized

•

Complex pharmacology

–

Not well characterized

•

Clinical trial(s) required

•

Branded competition in specific indication possible at

some point in the future

•

Difficult/impossible to reverse engineer ACTHAR

–

Not well characterized

•

Complex pharmacology

–

Not well characterized

•

Clinical trial(s) required

•

Branded competition in specific indication possible at

some point in the future

Biosimilar Pathway Difficult/Impossible

•

Understanding the biological properties of Acthar

–

Specific biochemical pathways, cells, and tissues

–

Immunomodulation and anti-inflammatory

•

On-label indications

–

Proteinuria in NS, MS flares, Lupus

•

New indications

–

Nephrology (eg, diabetic nephropathy)

–

Indications with autoimmune/inflammatory component (eg,

neurology, cardiovascular, hematology, pulmonary)

•

Understanding the biological properties of Acthar

–

Specific biochemical pathways, cells, and tissues

–

Immunomodulation and anti-inflammatory

•

On-label indications

–

Proteinuria in NS, MS flares, Lupus

•

New indications

–

Nephrology (eg, diabetic nephropathy)

–

Indications with autoimmune/inflammatory component (eg,

neurology, cardiovascular, hematology, pulmonary)

Questcor Acthar R&D Efforts:

> 30 Preclinical and Clinical Studies

Understanding Acthar:

science of how it works and clinical use

•

Clinical use of Acthar

–

Nonclinical research

–

Clinical research

•

On-label indications

–

Proteinuria in nephrotic syndrome (NS), multiple sclerosis (MS)

flares, infantile spasms, lupus

•

Off-label indications

–

Diabetic nephropathy, traumatic brain injury, autism, MS

maintenance treatment

•

Clinical use of Acthar

–

Nonclinical research

–

Clinical research

•

On-label indications

–

Proteinuria in nephrotic syndrome (NS), multiple sclerosis (MS)

flares, infantile spasms, lupus

•

Off-label indications

–

Diabetic nephropathy, traumatic brain injury, autism, MS

maintenance treatment

Academic Clinical Interest in Acthar:

~ 30 Investigator Initiated Studies

Understanding Acthar: clinical use

•

Expand Nephrotic Syndrome promotion effort

•

Expand Multiple Sclerosis promotion effort

•

Maintain Infantile Spasm promotion effort

•

Initiate pilot Rheumatology promotion activity

•

Develop other markets for Acthar

–

Acthar is its own pipeline with many on-label and new indications

–

Further define and develop the unique characteristics of Acthar

•

Expand Nephrotic Syndrome promotion effort

•

Expand Multiple Sclerosis promotion effort

•

Maintain Infantile Spasm promotion effort

•

Initiate pilot Rheumatology promotion activity

•

Develop other markets for Acthar

–

Acthar is its own pipeline with many on-label and new indications

–

Further define and develop the unique characteristics of Acthar

Strategic Plan-

Focus on the Embedded Pipeline in Acthar

Sales Force Expansion-

Outlook for 2012

Rheumatology Sales Pilot

Neuro Hiring

& Training

From 77 to

107 reps

Neuro

Sizing &

Alignment

Neph Hiring &

Training

From 28 to 58

reps

Neph Sizing &

Alignment

Q1-12

Q1-13

07/27/12

Cash / ST Investments

$135M*

Accounts Receivable

$61M

Questcor is Cash Flow Positive

Debt-free balance sheet

*After return of $303 million of cash to shareholders through share repurchases.

•

2.2 Million Preferred share buyback

•

18.7 Common share buyback

•

$303 million returned to shareholders in stock buybacks

–

Average repurchase price per share: $14.50

•

58.7

million shares currently outstanding

•

5.0 million share added to buyback authorization

•

3.7 million shares remain on buyback authorization

•

2.2 Million Preferred share buyback

•

18.7 Common share buyback

•

$303 million returned to shareholders in stock buybacks

–

Average repurchase price per share: $14.50

•

58.7

million shares currently outstanding

•

5.0 million share added to buyback authorization

•

3.7 million shares remain on buyback authorization

Share Repurchases: 20.9 Million Shares

Note: all information as of 7/27/12

•

5.5M shares repurchased during 2012, driven by:

–

Sales/EPS increase

–

NS market traction

–

Sales force expansion

–

Rheumatology opportunity

•

5.5M shares repurchased during 2012, driven by:

–

Sales/EPS increase

–

NS market traction

–

Sales force expansion

–

Rheumatology opportunity

2012 Repurchase Activity

Repurchased shares significantly improved EPS

Q2-2012 EPS accretion from share repurchase from 2008 through 6/30/2012: 30%

Acthar has sustainable competitive

advantages-without FDA approval risk

Acthar is approved for 19 indications-many

in large markets with sizable unmet need

Sales in NS and MS are growing rapidly,

yet market penetration is low

Developing new vertical market -

Rheumatology

High margins provide good

operating leverage

Profitable, cash flow positive, no debt

Investment Highlights

July 31, 2012

NASDAQ:

QCOR

NASDAQ:

QCOR

Acthar History

1968-1973

DESI review

= steroid label

> 50 indications

1978

indication added

2001-2003

Questcor acquires Acthar Gel

(MR), FDA approves

manufacturing

2010

Infantile spasms approved,

Label modernized

steroid

& 19 indications

2009-Present

Expanding Acthar Gel

(MR) research

1996

Manufacturing

problems

1950

Acthar

Powder –

1952-7

ACTH Powder

& MR

NDAs -

MR = modified release product (eg, Acthar Gel)

DC = Discontinued

1984

ACTH Powder

ANDA (Watson) -

2007

Questcor changes

Acthar Gel (MR)

strategy

1952 Acthar

Gel (MR)

2000

2010

1950

ACTH is a Melanocortin Peptide Derived from

Pro-opiomelanocortin (POMC) in the Pituitary

MCR

Prevalent Tissue/Cells with Receptor

MC1R

Podocytes

Renal Mesangial Cells

Endothelial Cells (Glomerular, Tubular, Vascular)

Tubular Epithelial Cells

Macrophages

Melanocytes

Immune/Inflammatory Cells

Kerantinocytes

CNS

MC2R

Adrenal Cortex (Steroidogenesis), Adipocytes

Adapted from Gong 2011, Catania 2004, Schioth 1997

Affinity of Melanocortin Peptides and

Distribution of Receptor Subtypes

MCR

Prevalent Tissue/Cells with Receptor

MC3R

CNS

Macrophages

MC4R

Podocytes

Renal Mesangial Cells (?)

Endothelial Cells (Glomerular, Tubular)

Tubular Epithelial Cells

CNS

MC5R

CNS

Exocrine Glands

Lymphocytes

Podocytes

Adapted from Gong 2011, Catania 2004, Schioth 1997

Affinity of Melanocortin Peptides and

Distribution of Receptor Subtypes

MOA of

Acthar in NS

Adapted From Gong 2011

Acthar,

Melanocortin Peptides

Acthar,

Melanocortin Peptides

QUESTCOR PHARMACEUTICALS INC - FORM 8-K - EX-99.1 - PRESENTATION MADE BY QUESTCOR PHARMACEUTICALS, INC. - July 31, 2012

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QUESTCOR PHARMACEUTICALS INC Reports