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Questcor Pharmaceuticals, Inc. (QCOR)

Reimbursement Process for H.P. Acthar Gel Conference Call

September 20, 2012 11:00 am ET

Executives

Doug Sherk – Investor Relations, EVC Group

Don M. Bailey – President and Chief Executive Officer

Stephen L. Cartt – Chief Operating Officer

Analysts

David Amsellem – Piper Jaffray

Steve Byrne – BofA Merrill Lynch

Mario Corso – Caris & Company, Inc.

Christopher Holterhoff – Oppenheimer & Co.

Marko Kozul – Leerink Swann Llc

Biren Amin – Jefferies & Co., Inc.

Jim F. Molloy – ThinkEquity LLC

Yale I. Jen – ROTH Capital Partners LLC

Tim Chiang – CRT Capital Group LLC

Presentation

Operator

Good day, ladies and gentlemen, thank you for standing by. Welcome to the Questcor Investor Conference Call. During today’s presentation all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator Instructions) This conference is being recorded today, Thursday, September 20, 2012.

I would now like to turn the conference over to Mr. Doug Sherk. Please go ahead, sir.

Doug Sherk

Thank you, operator, and good morning, everyone. Thank you for joining us today for the Questcor Pharmaceuticals conference call to discuss the reimbursement process, the company’s implements regarding insurance coverage for Acthar. We apologize for the delay in the start of the call, which was due to technical issues experienced by our service provider.

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’d like to remind you that during the course of this conference call, management 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-Q and 10-K, which identify the specific factors that may cause actual results or events to differ materially from those described in these forward-looking statements.

Finally, a couple of housekeeping items; we would like to make sure that during the question-and-answer session, we will allows as many questions possible so please keep the questions to two and then re-queue, if you have the need for any additional questions. We’ll take as many questions as time allows today. In advance, we thank you for your cooperation.

And now I'll like to turn the call over to Don Bailey, President and Chief Executive Officer of Questcor Pharmaceuticals.

Don M. Bailey

Thanks, Doug. Good morning, everyone. With me today are Steve Cartt, Chief Operating Officer; and Mick Mulroy, our Chief Financial Officer. In a few moments, Steve will be making prepared remarks. But before turning the call over to Steve, I’d like to make some brief comments.

Nearly 2 months since our July earnings call, we have continued to make significant progress with our business. Sales and prescription performance continues to improve and vials shipped during the quarter continued to be strong.

We completed the expansion of our nephrology and neurology sales forces and initiated a pilot selling effort in rheumatology, using the same formula that worked so well with MS and nephrotic syndrome. Prescriptions are coming in as a result of our pilot rheumatology effort, focusing on Acthar, polymyositis and dermatomyositis indication. And we are now seeing those prescriptions beginning to get paid and shipped. And we recently announced a positive development regarding our Medicaid rebates.

Most importantly, since that July call, many more patients who had essentially run out of treatment options across multiple FDA approved Acthar indications have been helped with Acthar. We remain committed to helping patients with serious, difficult-to-treat autoimmune and inflammatory conditions. It is this core focus that drives us to further invest in building our scientific and clinical understanding of our unique drug Acthar, and to further educate healthcare providers on its appropriate role in helping patients.

Before turning the call over to Steve Cartt, our Chief Operating Officer, who will provide you march related to the recent information concerning the insurance reimbursement for Acthar. I’d like to summarize the events of yesterday from an investor relations perspective.

We’ve learned that the publications for the first time of a new insurance policy bulletin yesterday morning and immediately went towards to determine whether it would have an impact on our business and to prepare a press release.

Shortly after issuing that release, we became aware of some statements been put out by the insurance carrier that issued the bulletin, which investors construed as potentially being in conflict with our press release. This required additional investigation and made a challenging to engage with investors in one-on-one call, due to the Regulation FD.

As Steve will discuss, that additional investigation has resulted in us reconfirming our statements in the press release, but we do not expect the bulletin to have a material adverse impact on our business. As you know, Questcor has a philosophy of providing investors with significant access to management and we will continue this practice in the future. Unfortunately, the sequence of events yesterday simply made that challenging.

With that, I will now turn the call over to Steve.

Stephen L. Cartt

Thanks, Don, and good morning, everyone. First and foremost insurance reimbursement continues to be very good for Acthar and MS relapses, Nephrotic Syndrome and IS. We are gaining valuable new experience on a daily basis regarding the insurance coverage we are seeing at this early stage of our effort in DMPM. We attribute this continued strong coverage to the severity of the health outcome. If these conditions are not adequately treated, coupled with the fact that Acthar is indicated and FDA approved in these conditions.

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