The product is developed and commercialized in collaboration with Genentech. During the first quarter of 2013, Rituxan’s sales were $265 million, a decrease of 7% over the same period in 2012. The decline resulted from the loss of royalty from outside the U.S. Efficiency of Rituxan is sometimes compromised due to its restriction to a few indications of NS. Compared to Rituxan, Acthar has higher potential in chronic stages of various indications of nephrotic syndrome.
The MS therapeutic market is flooded with blockbuster drugs such as Bayer’s Betaseron, Biogen Idec Inc (NASDAQ:BIIB)’s Avonex, Merck’s Rebif, and Teva’s Copaxane. Though they are effective, they are losing their market potential due to patent expiry and generic competition. Acthar is an alternative option which has already proved to be a useful immunosuppressive medication in MS patients.
Celebrex from Pfizer Inc. (NYSE:PFE) is indicated for treatment of osteoarthritis and rheumatoid arthritis worldwide. It is also used for pain management in adults in the U.S., Japan, and some regions in Europe. During first quarter of 2013, sales were $653 million, an increase of 3% over the same period in 2012. The rise was due to an increase in price in the U.S., though it experienced sales pressure from generics. Acthar addresses a broader group of indications than Celebrex.
Risks for Questcor
Despite its higher efficiency, cheaper steroids or other immunosuppressives can be used instead of Acthar due to its high price (around $28,000 per vial). This may have a negative impact on Acthar’s sales volume. In addition, there is no product candidate in the pipeline to support Questcor Pharmaceuticals Inc (NASDAQ:QCOR)’s business outside of Acthar.
Market performance
In first quarter of 2013, net sales were $135.1 million, up 41% compared to $96 million in the same period in 2012. The growth was due to increase in prescription demand of Acthar for NS, MS, and IS therapy. Net sales of Acthar were $126.7 million, up 32% over the same period in 2012.
In addition, sales of $8.4 million from BioVectrae improved Questcor Pharmaceuticals Inc (NASDAQ:QCOR)’s performance. The company has a strong financial position with cash balance of $153.4 million as of March 31, 2013.
Investment thesis
Questcor Pharmaceuticals Inc (NASDAQ:QCOR) has shown significant sales growth due to the increasing demand of its flagship product, Acthar, across four therapeutic areas. The company continues to identify and expand Acthar’s use in existing and new indications. The addition of BioVectra will open up opportunity for API sales. Finally, a strong cash position and a stable balance sheet will help drive growth for Questcor.
Kanak Kanti De has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Kanak is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article A Biotech Betting Everything on a Single Drug originally appeared on Fool.com is written by Kanak Kanti.
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