 1
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NASDAQ:
QCOR
NASDAQ:
QCOR
September 9, 2011
September 9, 2011
Exhibit 99.1 |
 2
Safe Harbor Statement
Note: Except for the historical information contained herein, this presentation 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 generate revenue from
sales of Acthar to treat on-label indications associated with nephrotic syndrome,
and our ability to develop other therapeutic uses for Acthar including Systemic Lupus Erythematosus;
research and development risks, including risks associated with Questcor's work in the area of
nephrotic syndrome and potential work in the area of Systemic Lupus Erythematosus, and
our reliance on third-parties to conduct research and development and the ability
of research and development to generate successful results; 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 operate within an industry that is highly
regulated at both the Federal and state level; our ability to effectively manage our growth, including
the expansion of our nephrotic syndrome selling effort, and our reliance on key personnel; the
impact to our business caused by economic conditions; our ability to protect our
proprietary rights; our ability to maintain effective controls over financial
reporting; the risk of product liability lawsuits; unforeseen business interruptions; volatility in Questcor's monthly
and quarterly Acthar shipments 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, 2010, and other documents filed with the Securities and
Exchange Commission.
The risk factors and other information contained in these documents should be considered in
evaluating Questcor's prospects and future financial performance. |
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Questcor
A biopharmaceutical company
whose product helps patients with serious,
difficult-to-treat medical conditions
A biopharmaceutical company
whose product helps patients with serious,
difficult-to-treat medical conditions |
 4
Questcor Overview
Flagship Product:
Flagship Product:
•
Profitable, cash flow positive, $170M* in cash, debt-free
•
Profitable, cash flow positive, $170M* in cash, debt-free
•
19 approved indications
•
19 approved indications
Key Markets:
Key Markets:
•
Multiple Sclerosis, Nephrotic Syndrome, Infantile Spasms
•
Combined market opportunity exceeds $1.5 billion
•
Multiple Sclerosis, Nephrotic Syndrome, Infantile Spasms
•
Combined market opportunity exceeds $1.5 billion
Strategy:
Strategy:
•
Grow Acthar sales in each key market
•
Develop on-label Lupus market for Acthar
•
Grow Acthar sales in each key market
•
Develop on-label Lupus market for Acthar
Financials:
Financials:
* As of 9/6/11 |
 History of
Acthar 1952
First
Approved
1978
MS Indication Added
2001
Questcor Acquires
Acthar
2010
Label Modernized
19 Indications
2007
Questcor Changes
Strategy
5 |
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Significant Barriers to Entry
6 |
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QCOR Strategy –
Sell More Acthar
Multiple Sclerosis (MS)
Multiple Sclerosis (MS)
Nephrotic Syndrome (NS)
Nephrotic Syndrome (NS)
Infantile Spasms (IS)
Infantile Spasms (IS)
Systemic
Lupus
Erythematosus |
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Acthar and MS
•
Neurodegenerative
disorder
•
Acute treatment for
relapses
•
Treatment for 1-2
weeks*
•
$40K-$50K/Rx
*Based on prescriptions written
Problematic
Problematic
Steroid Side
Steroid Side
Effects
Effects
Poor
Poor
Venous
Venous
Access
Access
Inadequate
Inadequate
Response to
Response to
Steroids
Steroids
Acthar
Acthar
when
when
“Steroids are
“Steroids are
not suitable”
not suitable” |
 9
MS
Sales
-
Record
of
Consistent
Growth
New Paid Rxs
New 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. 77
15
30
38
Yellow numbers in the bars show the number of MS sales
people making calls at the end of the quarter.
8
24
35
51
69
78
124
141
213
231
304
323
354
508
751
Q1 '08
Q2 '08
Q3 '08
Q4 '08
Q1 '09
Q2 '09
Q3 '09
Q4 '09
Q1 '10
Q2 '10
Q3 '10
Q4 '10
Q1 '11
Q2 '11 |
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Monthly MS Sales Are Promotion Sensitive
15-30 reps
0
50
100
150
200
250
300
0
50
100
150
200
250
300
MS Paid/Shipped RX's
30-38 reps
38-77 reps |
 11
•
Doubled sales force: 38 to 77 sales reps Nov 2010
•
Q2-2011 results
–
Q2-11 new, paid Rxs up 147% vs. Q2-10
–
MS about 60% of QCOR net sales*
•
Estimated $110M annualized run-rate*
–
About 400 prescribers in Q2
–
June was a record month
•
Q3 new, paid Rxs run-rate up about 10% from Q2**
–
August was a record month
•
Doubled sales force: 38 to 77 sales reps Nov 2010
•
Q2-2011 results
–
Q2-11 new, paid Rxs up 147% vs. Q2-10
–
MS about 60% of QCOR net sales*
•
Estimated $110M annualized run-rate*
–
About 400 prescribers in Q2
–
June was a record month
•
Q3 new, paid Rxs run-rate up about 10% from Q2**
–
August was a record month
MS Trends
*Based on Company estimates
**As of 8/31/11 |
 •
Characterized by excessive spilling of protein from the
kidneys into the urine (proteinuria)
•
Can result in end-stage renal disease (ESRD), dialysis,
transplant
•
Significant unmet need
–
Few treatment options
•
Treatment for 4-6 months*
•
$150K-250K/Rx
•
Characterized by excessive spilling of protein from the
kidneys into the urine (proteinuria)
•
Can result in end-stage renal disease (ESRD), dialysis,
transplant
•
Significant unmet need
–
Few treatment options
•
Treatment for 4-6 months*
•
$150K-250K/Rx
Acthar and Nephrotic Syndrome (NS)
*Based on prescriptions written
12 |
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NS Sales –
Off to a Good Start
New Paid Rxs
New 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. 5
Yellow numbers in the bars show the number of NS sales
people making calls at the end of the quarter.
11
4
8
7
18
45
Q1 '10
Q2 '10
Q3 '10
Q4 '10
Q1 '11
Q2 '11 |
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NS Market Size |
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•
Hired 5 reps to sell Acthar to nephrologists
–
Initiated sales efforts in early March 2011
–
Q1 2011 new, paid NS Rxs: 18
•
14 different prescribers
–
Q2 2011 new, paid NS Rxs: 45
•
37 different prescribers
•
6 month course of therapy creates future vial demand
•
Expanding NS selling effort: 5 to 28 NS reps by Oct 1
–
Planned sales calls to increase in Q4 by 7X over Q2
–
Disruption to NS sales in Q3 possible--current 5 NS reps hiring and
training
the
23
new
reps,
Q3
new,
paid
Rxs
run-rate
level
with
Q2*
•
Hired 5 reps to sell Acthar to nephrologists
–
Initiated sales efforts in early March 2011
–
Q1 2011 new, paid NS Rxs: 18
•
14 different prescribers
–
Q2 2011 new, paid NS Rxs: 45
•
37 different prescribers
•
6 month course of therapy creates future vial demand
•
Expanding NS selling effort: 5 to 28 NS reps by Oct 1
–
Planned sales calls to increase in Q4 by 7X over Q2
–
Disruption to NS sales in Q3 possible--current 5 NS reps hiring and
training
the
23
new
reps,
Q3
new,
paid
Rxs
run-rate
level
with
Q2*
NS Sales
*As of 8/31/11
|
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•
Treatment Resistant Idiopathic Membranous
Nephropathy
•
Dose response trial
–
Randomized, double blinded 3 arm study with 2 different dosage
regimens of Acthar and placebo
–
n=84 (approximate), 35 centers (approximate)
–
Endpoint is reduction of proteinuria
•
Trial milestones
–
First patient dosed in Q3
–
“First look”
data available late 2012
–
Final reporting mid 2013
•
Treatment Resistant Idiopathic Membranous
Nephropathy
•
Dose response trial
–
Randomized, double blinded 3 arm study with 2 different dosage
regimens of Acthar and placebo
–
n=84 (approximate), 35 centers (approximate)
–
Endpoint is reduction of proteinuria
•
Trial milestones
–
First patient dosed in Q3
–
“First look”
data available late 2012
–
Final reporting mid 2013
NS
Phase
IV
Company
Sponsored
Study |
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•
Devastating, refractory form of childhood epilepsy
–
Very poor developmental outcome if inadequately treated
•
Not responsive to standard anti-epileptic drugs
•
Ultra-rare orphan disorder
–
1,500 to 2,000 patients annually
•
Typically occurs in children less than 2 years old
•
Characterized by
–
“spasms”
–
a specific type of seizure
–
“hypsarrhythmia”
–
abnormal EEG pattern
•
Devastating, refractory form of childhood epilepsy
–
Very poor developmental outcome if inadequately treated
•
Not responsive to standard anti-epileptic drugs
•
Ultra-rare orphan disorder
–
1,500 to 2,000 patients annually
•
Typically occurs in children less than 2 years old
•
Characterized by
–
“spasms”
–
a specific type of seizure
–
“hypsarrhythmia”
–
abnormal EEG pattern
Infantile Spasms |
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•
FDA approval 10/15/10
•
Crisis therapy
•
Treatment for 2-4 weeks*
•
In a randomized, single-blinded, controlled study, 87%
of patients achieved overall response (no spasms and
no hypsarrhythmia) at two weeks versus 29% on
prednisone
•
$100K-$125K/Rx
–
About half of patients receive drug for free
•
FDA approval 10/15/10
•
Crisis therapy
•
Treatment for 2-4 weeks*
•
In a randomized, single-blinded, controlled study, 87%
of patients achieved overall response (no spasms and
no hypsarrhythmia) at two weeks versus 29% on
prednisone
•
$100K-$125K/Rx
–
About half of patients receive drug for free
Acthar and IS
*Based on prescriptions written |
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•
Targeting select institutions
–
Promotion effort being narrowed as market is maturing
–
Creates selling time for Acthar MS reps to target NS
•
Significant variability in quarterly Rxs
•
Q2-2011 new, paid Rxs within historic range
–
Acthar currently used to treat 40-50% of IS patients
–
Q3 new, paid Rxs run-rate level with Q2
•
Targeting select institutions
–
Promotion effort being narrowed as market is maturing
–
Creates selling time for Acthar MS reps to target NS
•
Significant variability in quarterly Rxs
•
Q2-2011 new, paid Rxs within historic range
–
Acthar currently used to treat 40-50% of IS patients
–
Q3 new, paid Rxs run-rate level with Q2
IS Sales |
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Immediate
Acthar
Growth
Opportunities
*Represents estimated net sales market opportunity based on internal company estimates
MS
•
Build on
sales
momentum,
good market
headroom
•
Market size-
$500M+*
NS
•
Good start
with 5 reps
•
Significantly
expanding
selling effort
•
Market size-
$1B+*
IS
•
Targeted
sales
strategy
•
Market size-
$100M* |
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•
Specialty Sales Force
–
Main focus on MS (time split is ~ 80%/15%/5% on MS/NS/IS)
–
77 representatives, 13 regional managers, one national director
•
Nephrology Sales Force
–
Focus 100% on Nephrotic Syndrome
–
28 representatives, 4 regional managers, one national director
–
All hired and on-board as of 9/12/11
•
Combined Forces will be calling on
–
>4,000 neurologists
–
>3,000 nephrologists
–
about 100 key children’s hospitals
•
Specialty Sales Force
–
Main focus on MS (time split is ~ 80%/15%/5% on MS/NS/IS)
–
77 representatives, 13 regional managers, one national director
•
Nephrology Sales Force
–
Focus 100% on Nephrotic Syndrome
–
28 representatives, 4 regional managers, one national director
–
All hired and on-board as of 9/12/11
•
Combined Forces will be calling on
–
>4,000 neurologists
–
>3,000 nephrologists
–
about 100 key children’s hospitals
Total Acthar Sales Force |
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•
High unmet need
•
Serious health risk if unsuccessfully treated
•
Difficult to treat
•
Multiple on-label indications for Acthar
–
Exacerbations
–
Maintenance therapy
–
Lupus nephritis
•
Large patient population
•
High unmet need
•
Serious health risk if unsuccessfully treated
•
Difficult to treat
•
Multiple on-label indications for Acthar
–
Exacerbations
–
Maintenance therapy
–
Lupus nephritis
•
Large patient population
Systemic
Lupus
Erythematosus
(Lupus) |
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Financials
Profitable
Profitable
Debt Free
Debt Free
Cash Flow Positive
Cash Flow Positive |
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Q2-2011
Financial
Results
Record Sales (up 62%) and Solid Earnings (EPS up 50%)
Record Sales (up 62%) and Solid Earnings (EPS up 50%)
•
Second quarter vials shipped: 2,430
•
Medicaid reserves continue to appear adequate
•
No shares repurchased
Net Sales ($M)
Net Sales ($M)
Gross Margin
Gross Margin
Operating Income ($M)
Operating Income ($M)
Fully Diluted, GAAP EPS
Fully Diluted, GAAP EPS
$46.0
$46.0
94%
94%
$20.4
$20.4
$0.21
$0.21
$28.3
$28.3
93%
93%
$14.3
$14.3
$0.14
$0.14
Q2-2011
Q2-2011
Q2-2010
Q2-2010 |
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Questcor
is
Cash
Flow
Positive
*After return of $78 million of cash to shareholders through
share repurchases.
Cash / ST Investments
Cash / ST Investments
Accounts Receivable
Accounts Receivable
$170M*
$170M*
$19M
$19M
9/6/11
9/6/11
Debt-free balance sheet
Debt-free balance sheet |
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Share Repurchases: 15 Million Shares
•
2.2 Million Preferred share buyback
•
13.2 Common share buyback
•
$78 million returned to shareholders in stock
buybacks
•
62.3 million shares currently outstanding
•
4.3 million shares remain on buyback authorization
•
2.2 Million Preferred share buyback
•
13.2 Common share buyback
•
$78 million returned to shareholders in stock
buybacks
•
62.3 million shares currently outstanding
•
4.3 million shares remain on buyback authorization
Repurchases significantly improve EPS
Repurchases significantly improve EPS |
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•
Sustain effort and momentum with MS
•
Expand NS selling effort
•
Maintain and gradually grow IS sales
•
Explore Systemic Lupus Erythematosus (Lupus) as next
vertical market
•
Develop other markets for Acthar
•
No business development efforts planned
•
Sustain effort and momentum with MS
•
Expand NS selling effort
•
Maintain and gradually grow IS sales
•
Explore Systemic Lupus Erythematosus (Lupus) as next
vertical market
•
Develop other markets for Acthar
•
No business development efforts planned
Go Forward Plan -
Sell More Acthar
–
Acthar is its own pipeline with many other on-label
and many possible other therapeutic uses
–
Further define and develop the unique
characteristics of Acthar |
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Investment Highlights |
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NASDAQ:
QCOR
NASDAQ:
QCOR
September 9, 2011
September 9, 2011 |