Sarepta Therapeutics Inc (SRPT), ISIS Pharmaceuticals, Inc. (ISIS): Is Questcor Pharmaceuticals Inc (QCOR) Still Undervalued?

It has been approximately a year since the Citron Research report about Questcor Pharmaceuticals Inc (NASDAQ:QCOR) came out, which caused the stock to lose more than half of its value. At the time, most of the industry experts were raising concerns and predicting that Questcor Pharmaceuticals Inc (NASDAQ:QCOR) will be another bio-Pharma to go under soon. However, I have always believed that the stock will make a recovery as the drug offered by the company is too important to ignore. In my previous posts about Questcor Pharmaceuticals Inc (NASDAQ:QCOR), I have detailed why I felt the stock will make a recovery. Going forward, I see more growth opportunities for the company, which will support further price appreciation.

What made the company come back to previous highs?
There are three main reasons that have caused the stock to make the recovery, in my opinion. The first and the most important reason is the continued growth in prescriptions and vial shipments. When Aetna decided to stop coverage for Acthar, investors believed that the other insurers will follow Aetna and Acthar will lose insurance coverage. However, most of the insurers continued to cover Acthar, and Questcor Pharmaceuticals Inc (NASDAQ:QCOR) was able to increase its prescriptions.

The second reason is the change in the investor perception about the stock. There is a clear change in the mood of investors regarding Questcor Pharmaceuticals Inc (NASDAQ:QCOR). Investors realized that the market overacted to a piece of negative news about the stock, and it presented a buying opportunity. Since the fall year, the stock has been on an upward trend and currently trades at a level higher than a year ago. The underlying growth is solid for the company and based on the expected future growth, the stock is trading at a discount. However, it should be kept in mind that another regulatory action against the company can again bring down the stock price. At the moment, health care costs are a big concern, and Acthar costs about $28,000, which is not exactly a cheap medication.

The third and probably most important reason for the comeback is the expansion opportunities for Acthar. The drug is extremely effective against certain conditions, which do not have conventional treatment. Acthar can be prescribed for a number of conditions, including kidney ailments; a rare seizure disorder that affects infants; and multiple sclerosis, which attacks the brain and spinal cord. An important thing to remember is that the company has not yet captured these markets completely. So, there is room for further growth in these areas.