questcorOn June 11, Questcor Pharmaceuticals Inc (NASDAQ:QCOR) surprised the investment community with news that it had acquired rights to Synacthen for the United States and up to 40 countries from Novartis AG (ADR) (NYSE:NVS). Within weeks the stock had doubled on that news, adding 1.75 billion in market cap.  Why?

Simple.  Synacthen is a synthetic version of ACTH, the sole labeled active ingredient in Acthar, which is Questcor Pharmaceuticals Inc (NASDAQ:QCOR)’s only source of revenue.  Synacthen has been prescribed in Europe for well over a decade for the same general spectrum of indications that Acthar is labeled for in the US – but at 1/1000th the price.

So when Questcor Pharmaceuticals Inc (NASDAQ:QCOR), which previously had no pipeline, no investigational efforts, and no significant double-blind studies proving efficacy of Acthar vs Synacthen, acquired these rights, the analyst community  went all giddy –  fawning all over how this move protected Questcor’s barrier to competition with regard to the pricing of Acthar.  Questcor postured the deal as if they bought Synacthen just because they wanted to acquire a new drug, but anyone with half a brain knew that was bullshit.

And thank God the FTC has more than half a brain … sorry, Questcor Pharmaceuticals Inc (NASDAQ:QCOR).

Questcor and the FTC Final by