Derek Archila, Sector Manager
September 14, 2011
Purchase Price $28.26
Target Price $41.00
Acthar: 1 drug with 19 possibilities….
- Despite Questcors’s drug Acthar being approved for 19 different indications, it is currently marketed for only three indications (MS, IS and NS). In addition, the company is investigating entry into the Lupus market (>$1B market).
- We forecast an increase in Q42011 and Q12012 sales, driven by a newly hired Nephrotic Syndrome (NS) sales force. The estimated cost of treatment for NS is $150K-$250K/patient. The estimated NS market equates to approximately $1B.
- Acthar is the standard of care for Infantile Spasms (IS) and was awarded orphan drug designation in 4Q2010.
- A strong management team with a proven ability to increase sales and create new markets for Acthar is in place.
- We believe that Questcor’s opportunity for share buy backs (4.3M left on buy back authorization) will lead to positive EPS growth and enhanced shareholder value.