Questcor Reports 90% Revenue Growth During Second Quarter; Company Reduces Operating Expenses by 17%.

Health/Medical Writers

UNION CITY, Calif.--(BW HealthWire)--Aug. 8, 2001

Questcor Pharmaceuticals, Inc. (AMEX:QSC) today reports financial results for the second quarter and six months ended June 30, 2001.

Questcor is a specialty pharmaceutical company that serves the needs of the acute care and critical care hospital markets.

Quarter and Six Months Ended June 30, 2001 Financial Results

During the second quarter, the Company reported revenues of $1,033,000 and a net loss of $1,997,000 or $0.07 per share as compared to revenue of $543,000 and a net loss of $3,747,000 or $0.15 per share for the comparable quarter ended June 30, 2000.

The 90% increase in revenue over the comparable 2000 period was the result of a 93% increase in sales from the Company's marketed products. The Company reduced operating expenses by 17% from $4,156,000 in the second quarter of 2000 to $3,461,000 during the current quarter. These reductions were a result of reduced cost of product sales due to the elimination of Neoflo(TM) from the product line, cost savings in administrative and facility related expenses, a reduction in development expenses paid to Shire Pharmaceuticals Group, plc for the clinical development of Emitasol(R), and the partnering of the Company's discovery research programs which are now being conducted entirely by Dainippon Pharmaceutical Co., Rigel, Inc. and Tularik, Inc. The Company's cash burn from operations (net loss before depreciation and amortization) was $1,444,000 for the second quarter of 2001 as compared to $3,190,000, a decrease of 55% over the comparable quarter ended June 30, 2000.

"Our second quarter results are consistent with first quarter results," said Charles J. Casamento, Chairman, President and CEO. "Our revenues continue to increase while our operating costs and our cash burn are decreasing. This is a result of our enhanced marketing and sales effort as well as our demonstrated ability to control costs and to prioritize projects. We are hopeful that the inclusion of HP Acthar(R) Gel into our line of marketed products will assist us in continuing to build the business."

For the six months ended June 30, 2001, the Company reported revenue of $2,049,000 and a net loss of $3,869,000 or $0.14 per share as compared to revenue of $1,241,000 and a net loss of $8,998,000 or $0.36 per share for the six months ended June 30, 2000.

The 65% increase in revenue is the result of a 63% increase in marketed product sales combined with an 81% increase in contract research, grant and technology revenue over the comparable 2000 period. The Company's operating expenses decreased 35% due to the cost saving measures outlined above. Cash burn from operations was $2,757,000 for the six months ended June 30, 2001 as compared to $7,905,000 for the six months ended June 30, 2000.

On July 30, 2001, Sigma-Tau Finance Holding S.A. ("Sigma-Tau") exercised a previously issued and outstanding warrant to purchase 2,873,563 shares of Company common stock at $0.522 per share for an aggregate purchase price of $1.4 million (in addition to the $100,000 previously paid to acquire the warrant). On July 31, 2001, in a separate transaction, the Company issued and sold to Sigma-Tau an additional 5,279,034 shares of common stock at $0.663 per share for an aggregate purchase price of $3.5 million. Based on these Sigma-Tau investments, the addition of HP Acthar(R) Gel to the Company's product line (announced on July 31, 2001) and its anticipated product revenues and the expected continued growth of existing product revenues, the Company believes it will have sufficient capital to fund its operating requirements through at least the end of 2001, and, assuming sales forecasts are met, the Company believes it will have sufficient capital to fund its operating requirements through the end of 2002.

About Questcor

Questcor Pharmaceuticals, Inc. is a specialty pharmaceutical company that serves the needs of the acute care and critical care hospital markets with its proprietary products including Glofil(TM)-125 and Inulin for measuring renal GFR, Ethamolin(R) for sclerotherapy, and Pramidin(R) for diabetic gastroparesis. Questcor's late stage pipeline products are being developed to treat diabetic gastroparesis (stomach paralysis), delayed onset emesis (vomiting), congenital lactic acidosis (CLA), and various central nervous system disorders. As part of a strategy to develop its products globally, Questcor has entered into over 20 contractual relationships with public and private companies including: Ahn-Gook Pharmaceuticals, of Korea; CSC Pharmaceuticals HandelsGmbH of Vienna, Austria; Crinos Group of Como, Italy; Dainippon Pharmaceutical Co., Ltd., of Osaka, Japan; Rigel, Inc. of South San Francisco, CA; and Tularik, Inc. of South San Francisco, CA.

Note: Except for the historical information contained herein, this press release contains forward-looking statements that involve risks and uncertainties. Such statements are subject to certain factors, which may cause the Company's results to differ. Factors that may cause such differences include, but are not limited to, the Company's need for additional funding, uncertainties regarding the Company's intellectual property and other research, development, marketing and regulatory risks, and, to the ability of the Company to implement its strategy and acquire products and, if acquired, to market them successfully as well as the risks discussed in Questcor's report on Form 10-K/A for the calendar year ended December 31, 2000 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 Pharmaceuticals, Inc.
                  Selected Balance Sheet Information
                            (In Thousands)
                              (unaudited)

                                 June 30                December 31,
                                  2001                     2000
                             -----------------      ------------------

Cash, cash equivalents
 and short-term
  investments (including
  compensating balance
  of $5 million)                 $ 6,754                  $ 8,151
Working capital                      318                    1,201
Total assets                      12,738                   14,969
Long-term obligations                355                      548
Preferred stock                    5,081                    5,081
Stockholders' equity (deficit)      (971)                     927


                    Questcor Pharmaceuticals, Inc.
                       Statements of Operations
                 (In thousands, except per share data)
                              (unaudited)


                           Three Months Ended       Six Months Ended
                           -------------------    --------------------
                            June 30,   June 30,    June 30,   June 30,
                              2001       2000        2001       2000
Revenues:
  Net product sales           $ 971     $ 503     $ 1,672      $1,023
  Technology revenue             --        --          90          --
  Contract research revenue      57        40         282         206
  Royalty revenue                 5        --           5          12
                            ---------  --------   ---------  ---------

Total revenues                1,033       543       2,049       1,241
Operating costs and expenses:
 Cost of product sales          276       460         637       1,046
 Sales and marketing            834       661       1,478       1,172
 General and administrative   1,011     1,396       1,857       2,937
 Research and development       787     1,082       1,537       3,967
 Depreciation
   and amortization             553       557       1,112       1,093
                           ----------  -------     --------   --------
Total operating
  costs and expenses          3,461     4,156       6,621      10,215
                           ----------  -------     --------    -------
Loss from operations         (2,428)   (3,613)     (4,572)     (8,974)
Interest and
 other income, net               25         1          52          59
Rental income, net              406      (135)        651         (83)
                           ---------- ---------   ---------   --------
Net loss                    $(1,997)  $(3,747)    $(3,869)    $(8,998)
                           ========== =========   =========   ========

Net loss per common share
Basic and diluted            $(0.07)  $ (0.15)    $ (0.14)    $ (0.36)
                           ========== =========   =========   ========
Weighted average shares
 of common stock
 outstanding                 28,277    24,761      26,832      24,672
                           ==========  ========    ========   ========