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Questcor Pharmaceuticals, Inc. (QCOR)
Q2 2011 Earnings Conference Call
July 26, 2011 16:30 ET
Doug Sherk – Investor Relations
Don Bailey – President and Chief Executive Officer
Steve Cartt – Chief Business Officer
Dr. David Young – Chief Scientific Officer
Mike Mulroy – Chief Financial Officer
Mario Corso – Caris & Company
Tim Chiang – CRT Capital Group
John Newman – Citadel Securites
Chris Holterhoff – Oppenheimer & Company
Yale Jen – Maxim Group
Biren Amin – Jefferies & Company
Patrick Glenn – Primarius Capital
Previous Statements by QCOR
» Questcor Pharmaceuticals CEO Discusses Q1 2011 Results - Earnings Call Transcript
» Questcor Pharmaceuticals CEO Discusses Q4 2010 Results - Earnings Call Transcript
» Questcor Pharmaceuticals CEO Discusses Q3 2010 Results – Earnings Call Transcript
» Questcor Pharmaceuticals, Inc. Q2 2010 Earnings Call Transcript
This conference is being recorded today Tuesday, July 26, 2011. I would now like to turn the conference over to Mr. Doug Sherk. Please go ahead sir.
Thank you, operator and good afternoon everyone. Thank you for joining us today on the Questcor Pharmaceuticals’ conference call to discuss the second quarter 2011 financial results. This afternoon at the market close, Questcor issued its second quarter earnings release, which is posted on the company’s website at www.questcor.com. The call is being broadcast live via webcast with an accompanying slides presentation a new feature today and archive of both will also be available at the Questcor’s website.
To access the webcast including the presentation slides and the archive go to Questcor’s website at www.questcor.com in the investor relations section under events and presentation. If you are listening via telephone to view the company’s presentation slides, navigate to the live webcast is noted and choose the no audio slides-only option to view the slides in conjunction with the live conference call. There will be a taped replay of this call, which will be available approximately one hour after the call’s conclusion and will remain available for seven days. The operator will provide the replay instructions at the end of today’s call.
Before we get started, I would like to remind you that during the course of this conference call, the company will make projections and forward-looking statements regarding future events. We encourage you to review the company’s past and future filings with the SEC, including without limitation the company’s Forms 10-K and 10-Q, which identify the specific factors that may cause actual results or events to differ materially from those described in these forward-looking statements.
With that, let me turn the call over to Don Bailey, President and Chief Executive Officer of Questcor Pharmaceuticals.
Thanks, Doug. Good afternoon, everyone. With me today are several other members of our management team. Three of them will be making prepared remarks, Steve Cartt, our Chief Business Officer; Dr. David Young, Chief Scientific Officer and Mike Mulroy, our CFO.
If you have access to the slides accompanying our remarks today, please note that the headlines from this afternoon new release are highlighted on the screen. The headline demonstrates the Questcor had a terrific quarter. Our straightforward strategy to sell more Acthar is delivering exceptional growth. 140 year-over-year growth for Acthar in the MS market is leading the parade. At the same time, our native nephrotic syndrome selling effort had a superb full quarter.
Our first full quarter selling Acthar for NS – because that effort just started in March of this year. As a result of this success in NS, we are immediately and substantially expanding our nephrology selling effort without decreasing our resources or focus on MS. By substantially we mean that the selling effort for nephritic syndrome will be increased by over seven times, once the added sales representative are hired and trained.
The exceptional MS and NS sales growth along with the very good IS sales quarter naturally led to a record Acthar vial shipped quarter, record sale and record earnings. In addition today, we are announcing the fourth vertical market, we aim develop for Acthar, which is lupus.
We have been steadily growing MS Acthar prescriptions for 14 consecutive quarters. Our key focus on expanding the use of Acthar and the treatment of MS exacerbation or relapses drove our year-over-year increase in the number paid Acthar prescriptions for MS. In the second quarter, we had 751 paid MS reps compared to 304 a year ago. The dramatic growth in MS prescriptions that emerged in March continued throughout the second quarter.
If you look at the green line on this chart, you can see the month MS sales levels during the second quarter. The major factor behind the increased prescriptions is the increased productivity of our MS sales force. The chart on your screen now illustrates the strong correlation between sales calls on neurologist and new prescriptions.
The drop in sales calls during June was due to our holding international meeting to discuss the nephrology expansion with our entire commercial team. We believe Acthar is MS sales performance is being driven by positive patient outcomes and the increase in productivity of our MS sales force.
If you annualize the second quarter prescription count, you get about 300,000 Acthar MS prescriptions annually. So, that’s 751 times four. While we do not have definitive data on the total number of MS relapse patients for whom steroids are not returning them to an acceptable quality of life, we can safely say that there appears to be ample room for growth for Acthar in this MS market, that are approximately 200,000 relapse new reps.