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Questcor: FDA Delays Drug Approval
Questcor announced late Wednesday that the U.S. Food and Drug Administration has delayed for the second time an approval decision for the company's drug Acthar as a treatment for infantile spasms.
A new approval date has not been announced but Questcor said FDA's review will extend beyond the current Sept. 11 deadline because regulators need more time to finalize the wording on the label, review the proposed medication guide, and define post-approval commitments, if any, for the infantile spasms indication.
Questcor shares were down 18 cents to $10.20 after the company's announcement was released. Ahead of the news, the stock closed up almost 8% to $10.38.
To cushion the disappointment of the new Acthar approval delay, Questcor described third quarter prescription and sales levels to date as "encouraging."
Questcor currently markets Acthar for the treatment of multiple sclerosis flares but the drug also benefits from considerable off-label use in infantile spasms as well. In that regard, an FDA rejection or delay to an official approval in infantile spasms isn't likely to have a significant negative impact on Questcor's financials.
FDA approval will allow Questcor to legally market Acthar to doctors who treat infantile spasms and it would give the company orphan drug status, meaning generic drug makers would be barred from entering the market for seven years.
Infantile spasms is a rare and serious epileptic seizure disorder.
An FDA advisory panel in May voted overwhelmingly to recommend Acthar's approval. The FDA was supposed to issue an approval decision in June but pushed it back to Sept. 11 to give the agency more time to review the drug's data Wednesday, Oppenheimer analyst John Newman told clients in a note to expect FDA's full approval of Acthar to treat infantile spasms, which could add $10 million to $15 million to the company's top line and provide an earnings boost of 4 cents to 9 cents per share. Newman has a buy rating on Questcor and a $14 price target.
Questcor shares spiked to $11.25 on July 29, the day after the company reported better-than-expected financial results for the second quarter. Since then, the stock has drifted down, closing Tuesday at $9.62.
Only two analysts cover the company, but on average, they forecast Questcor earning 59 cents a share in 2010 growing to 79 cents a share in 2011. Revenue in 2010 is expected to total $118.6 million, growing to $149.9 million in 2011.