Citron Research with bearish report on Questcor Pharmaceuticals Inc (NASDAQ:QCOR)

In what might be our most socially relevant report to date Citron exposes explosive findings behind the true components of Questcor Pharmaceuticals Inc (NASDAQ:QCOR) flagship drug HP Acthar Gel.  This is a must read for all investors, as Citron has taken the extra steps necessary to uncover the “mystery” active ingredients in one of the most controversial drugs on the marketplace.  

Questcor Pharmaceuticals Inc (NASDAQ:QCOR) has been a battleground stock for years.  Bulls have stood by the strong financial performance of the company, while bears have been clinging to the threat of multiple government investigations and lack of clinical data for this “magical” $30,000 per vial drug.

Citron Research is very aware of the grave nature of the above headline, and the impact of information disclosed in this story. We understand clearly that there are consequences for making statements that are false or based upon incorrect assumptions. We have been exposing fraud for 13 years and have never hidden behind a guise of anonymity. We have always invited our work to be subject to legal scrutiny. That being said, we ask all Questcor shareholders – long and short – to take a big breath, sit down, and read. Citron publishes what we

 

believe to be our most detailed and explosive report to date on Acthar, and Questcor(NASDAQ:QCOR).

 

It is no secret that Acthar is a controversial drug, marketed by Questcor, a highly controversial company. Its hefty price tag, aggressive marketing strategy, and secretive management have landed it in the crosshairs of multiple government agency investigations, including two U.S. Attorneys General, plus the SEC. But this might be the least of their problems. What Citron reveals here will now change the game on Questcor.

 

Please read the first 5 pages for proper background – you’ll understand the route by which the truth came to light.

 

What Led us to this Study?

For those familiar with the background on Acthar, management consistently tells a story about the “secret sauce” inside the drug that makes it unique. Here is a vintage excerpt in CEO Don Bailey own words:

 

“I’d like to go through the barriers to entry because this is the key question most investors have with respect to the longevity of this unusual asset.

 

The first barrier to entry is the formulation. Acthar is a biologic. Acthar is an extraction of porcine pituitaries. It’s an undisclosed composition, so that’s a trade secret. The manufacturing process is also a trade secret. It’s complex, it’s unique, and we own all elements of the manufacturing process. We have exclusive worldwide rights to Acthar, so we own it lock, stock and barrel. We have no partners. The composition of Acthar that comes out of the manufacturing process is tied to the process, so if you don’t know the process you can’t figure out what’s actually in Acthar. Acthar is technically a polypeptide, but there are probably multiple active ingredients and there are multiple peptides within Acthar, and they’re undisclosed.”

 

— Questcor Investor presentation Aug 22, 2011, filed as an 8-K

 

 http://www.sec.gov/Archives/edgar/data/891288/000119312511225705/dex991.htm

 

The company’s claim of a very difficult manufacturing process and unknown ingredients supplementing highly purified ACTH has always been their competitive moat. Managementclaims this makes Acthar a unique drug for multiple difficult-to-treat diseases, and not possible to compete with.

 

Until now, it has been Citron’s strong opinion that evaluating the above statement was pivotal to assessing the barrier to entry for any competitor to Acthar – and therefore, to determine whether the value of Questcor’s stock was sustainable.

 

However, ALL OF THIS RHETORIC IS COMPLETELY FALSE. Based on previously undisclosed independent laboratory findings, the above is a blatant misrepresentation to investors and patients alike. That is the essence of today’s report.

 

It is critically important for every Questcor investor, long or short, to understand fully the claims implied by CEO Bailey’s statement above.

 

 Acthar’s label (revised in 2012),by which it gains grandfathered permission from the FDA to sellActhar in the United States, states it has one active ingredient: Corticotropin, or purified ACTH.

 

Despite the drug’s explicit and unambiguous label, CEO Bailey claims there is

 

“something else” in the vial. Can he blame anyone for trying to find out what it really is? Read on.

 

Questor QCOR Frauds Socially Responsible Questcor
Questor QCOR

THAT HAS ALL NOW CHANGED

Today Citron puts that entire debate in an entirely new light. The entire debate is now reduced to just one single relevant question … nothing else matters.

 

What is in that $30,000 vial? You will be shocked when you find out.

Citron presents the findings of a compelling scientific inquiry from some of the nation’s pre-eminent analytical laboratories. These results, which have already been presented to the FDA, seek an answer to the one question that neither the longs nor the shorts has ever really known:

Full article here  QCOR QCOR-ACTH-and-the-FDA-final