Questcor Announces Financial Results for 2006 and Outlook for 2007.Fourth Quarter Acthar Net Sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight Increase 111% over Fourth Quarter 2005 UNION CITY, Calif. -- Questcor Pharmaceuticals, Inc. (AMEX AMEX See: American Stock Exchange :QSC QSC Quality Service Communications (Cologne, Germany) QSC Quilter Sound Company (QSC Audio Products Inc.) QSC Queens Surface Corporation QSC Low-Traffic Ship (radiotelegraphy) ) today reported its financial results for the quarter and year ended December 31, 2006. Total net product sales for the fourth quarter of 2006 were $3.4 million, up 87% from the fourth quarter of 2005. 2006 net sales of H.P. Acthar[R] Gel (repository corticotropin corticotropin (kôr'təkōtrōp`ən): see adrenocorticotropic hormone. injection) ("Acthar") increased 43% from 2005 to $12.1 million. For the fourth quarter of 2006, net loss applicable to common shareholders totaled $3.3 million, or $0.06 per share. In the fourth quarter of 2005, net income applicable to common shareholders totaled $5.4 million, or $0.10 per share, and included a one-time gain of $9.6 million, or $0.18 per share, from the sale of Questcor's non-core commercial pharmaceutical products. For the 2006 full year, net loss applicable to common shareholders totaled $10.1 million, or $0.18 per share, compared to net income applicable to common shareholders of $5.1 million, or $0.10 per share, for 2005, which included the one-time gain of $9.6 million, or $0.18 per share. In addition to the significant increase in Acthar sales during 2006, other key accomplishments during 2006 included: * The redemption of all outstanding Series B convertible preferred stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". for a total payment of $7.8 million. * The expansion of our central nervous system ("CNS See Continuous net settlement. CNS See continuous net settlement (CNS). ") specialty sales force to 44 professionals. * The acquisition and launch by our neurology sales force of our second CNS product, Doral[R] (quazepam) for the treatment of sleep disorders Sleep Disorders Definition Sleep disorders are a group of syndromes characterized by disturbance in the patient's amount of sleep, quality or timing of sleep, or in behaviors or physiological conditions associated with sleep. . * The filing of a supplemental new drug application ("sNDA") for the treatment of infantile spasms infantile spasm n. Brief muscular spasms in infants, usually lasting from one to three seconds and often appearing as nodding spasms. with Acthar. * The initiation of clinical development for QSC-001, a unique orally disintegrating tablet The Food and Drug Administration's (FDA) definition of an orally disintegrating tablet (ODT) is: "A solid dosage form containing medicinal substances which disintegrates rapidly, usually within a matter of seconds, when placed upon the tongue. ("ODT See SCO Open Desktop. ODT - Open Desktop ") formulation of hydrocodone bitartrate and acetaminophen hydrocodone bitartrate and acetaminophen Warning - High-alert drug! Anexsia, Ceta-Plus, Co-Gesic, Hydrocet, Lorcet-HD, Lortab, Vicodin, Vicodin HP Pharmacologic class: ("HB/APAP") for the treatment of moderate to moderately severe pain. * The closing of a registered direct offering of common stock with net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of $12.7 million. James Fares, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Questcor, commented, "We are pleased to report another solid quarter and a very successful 2006, but more importantly, we are excited about our momentum towards building a leading CNS-focused specialty pharmaceutical company. By maximizing the value of our current brands and beginning to build a meaningful clinical pipeline, we are taking the steps necessary to achieve the next level of success. Over the past year, we have been able to re-focus the company and are now well positioned to accelerate our commercial growth and development efforts in 2007." 2007 Outlook Questcor has established the following key objectives for 2007: * Obtain a positive response from the U.S. Food and Drug Administration ("FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. ") on our sNDA for the treatment of infantile spasms with Acthar. * Complete the development work necessary to continue the clinical studies on QSC-001 to support a New Drug Application ("NDA (Non Disclosure Agreement) An agreement signed between two parties that have to disclose confidential information to each other in order to do business. In general, the NDA states why the information is being divulged and stipulates that it cannot be used for any ") filing with the FDA in 2008. * Add at least one new pipeline or commercial opportunity. * Increase net sales to greater than $18 million. Financial Results for the Quarter and Year Ended December 31, 2006 Total net product sales were $3.4 million and $12.8 million for the quarter and year ended December 31, 2006, respectively, as compared to total net product sales of $1.8 million and $14.2 million for the quarter and year ended December 31, 2005, respectively. Total net product sales for the quarter and year ended December 31, 2005 included $367,000 and $5.7 million, respectively, of net product sales related to the commercial product lines Questcor divested during the fourth quarter of 2005. Net product sales of Acthar were $3.1 million for the fourth quarter of 2006, an increase of 111% over Acthar net product sales of $1.4 million in fourth quarter of 2005. Acthar net product sales were $12.1 million for the year ended December 31, 2006, an increase of 43% over Acthar net product sales of $8.4 million for the year ended December 31, 2005. The increase in Acthar net product sales was due primarily to increased promotion by Questcor's expanded sales organization and targeted marketing initiatives. Net product sales of Doral were $342,000 for the fourth quarter of 2006 and $714,000 for the period from Questcor's acquisition of Doral in May 2006 through December 31, 2006. Questcor began selling Doral in late May and promoting the product in mid-July. Operating costs operating costs npl → gastos mpl operacionales and expenses were $7.0 million and $23.6 million for the quarter and year ended December 31, 2006, respectively, as compared to operating costs and expenses of $4.4 million and $16.4 million for the quarter and year ended December 31, 2005, respectively. Selling, general and administrative expenses were $4.7 million and $17.3 million for the quarter and year ended December 31, 2006, respectively, as compared to $2.9 million and $10.0 million for the quarter and year ended December 31, 2005, respectively. The increase was due primarily to the expansion of Questcor's sales organization and increased marketing efforts for Acthar. Research and development expenses were $1.4 million and $3.0 million for the quarter and year ended December 31, 2006, respectively, as compared to $630,000 and $2.2 million for the quarter and year ended December 31, 2005, respectively. During 2006, Questcor filed an sNDA for the treatment of infantile spasms with Acthar and initiated a new clinical development program for QSC-001. As of December 31, 2006, Questcor's cash, cash equivalents and short-term investments totaled $18.4 million as compared to $26.6 million as of December 31, 2005. During 2006, Questcor used $9.7 million of cash in operations, $7.8 million to redeem its outstanding Series B convertible preferred stock, and $4.1 million to acquire Doral, which was partially offset by $13.6 million of cash generated from the issuance of common stock. During the fourth quarter of 2006, Questcor netted cash proceeds of $12.7 million from the issuance of 11.4 million shares of its common stock. Questcor expects that its cash used in operations during 2007 will be consistent with 2006. As of December 31, 2006, Questcor had 68,740,804 common shares and 2,155,715 Series A preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. outstanding. Year ended December 31, 2006 Conference Call - Questcor will be hosting a conference call to discuss these results on Monday, March 12, 2007 at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). Please call the following numbers to participate: 800-741-6056 (domestic) or 706-679-3280 (international) and use conference ID number 1093316. Participants are asked to call the above numbers 5-10 minutes prior to the starting time Noun 1. starting time - the time at which something is supposed to begin; "they got an early start"; "she knew from the get-go that he was the man for her" commencement, get-go, offset, outset, showtime, start, kickoff, beginning, first . This call is being webcast by Thomson/CCBN and can be accessed at Questcor's website at www.questcor.com. The webcast is also being distributed through the Thomson StreetEvents Network to both institutional and individual investors. Individual investors can listen to the call at www.earnings.com, Thomson/CCBN's individual investor portal, powered by StreetEvents. Institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. can access the call via Thomson's password-protected event management site, StreetEvents (www.streetevents.com). A telephonic replay of this call will be available from 9:00 p.m. Eastern Time on March 12, 2007 through 11:59 p.m. Eastern Time on March 19, 2007. Please call 800-642-1687 (domestic) or 706-645-9291 (international) and use conference ID number 1093316. About Questcor - Questcor Pharmaceuticals, Inc.([R]) (AMEX:QSC) is a specialty pharmaceutical company that develops and commercializes novel therapeutics for the treatment of neurological disorders This is a list of major and frequently observed neurological disorders (e.g. Alzheimer's disease), symptoms (e.g.back pain), signs (e.g. aphasia) and syndromes (e.g. Aicardi syndrome). . Questcor currently markets H.P. Acthar([R]) Gel (repository corticotropin injection), an injectable in·ject·a·ble adj. Capable of being injected. Used of a drug. n. A drug or medicine that can be injected. drug indicated for the treatment of exacerbations associated with Multiple Sclerosis and Doral([R]) (quazepam) that is indicated for the treatment of insomnia insomnia, abnormal wakefulness or inability to sleep. The condition may result from illness or physical discomfort, or it may be caused by stimulants such as coffee or drugs. However, frequently some psychological factor, such as worry or tension, is the cause. , characterized by difficulty in falling asleep, frequent nocturnal awakenings, and/or early morning awakenings. For more information, please visit www.questcor.com. Note: Except for the historical information contained herein, this press release contains forward-looking statements, including, without limitation, those set forth under the heading "2007 Outlook" that involve risks and uncertainties. Such statements are subject to certain factors, which may cause Questcor's results to differ from those reported herein. Factors that may cause such differences include, but are not limited to, Questcor's ability to accurately forecast and create the demand for its products, the gross margin achieved from the sale of its products, Questcor's ability to enforce its product returns policy, the accuracy of the prescription data purchased from independent third parties by Questcor, the sell-through by Questcor's distributors, the inventories carried by Questcor's distributors, and the expenses and other cash needs for the upcoming periods, Questcor's ability to obtain finished goods from its sole source contract manufacturers on a timely basis if at all, Questcor's potential future need for additional funding, Questcor's ability to utilize its net operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. carry forwards to reduce income taxes on the sale of its non-core products, research and development risks, uncertainties regarding Questcor's intellectual property and the uncertainty of receiving required regulatory approvals in a timely way, or at all, other research, development, marketing and regulatory risks, and the ability of Questcor to implement its strategy and acquire products and, if acquired, to market them successfully and find marketing partners where appropriate, as well as the risks discussed in Questcor's annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2005 and other documents filed with the Securities and Exchange Commission. The risk factors and other information contained in these documents should be considered in evaluating Questcor's prospects and future financial performance. Questcor undertakes no obligation to publicly release the result of any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. [TABLE OMITTED] [TABLE OMITTED] |
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