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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 9, 2006
QUESTCOR PHARMACEUTICALS, INC.
(Exact Name of Registrant as Specified in Charter)
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California
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001-14758
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33-0476164 |
(State or Other Jurisdiction
of Incorporation)
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(Commission File Number)
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(I.R.S. Employer
Identification No.) |
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3260 Whipple Road Union City, California
(Address of Principal Executive Offices)
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94587
(Zip Code) |
Registrants telephone number, including area code:
(510) 400-0700
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
Item 2.02. Results of Operations and Financial Condition.
On May 9, 2006, Questcor Pharmaceuticals, Inc. (the Company) announced via press release its
results for the quarter ended March 31, 2006. A copy of the Companys press release is attached
hereto as Exhibit 99.1. In accordance with General Instruction B.2. of Form 8-K, the information in
Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed filed
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act),
or otherwise subject to the liability of that section, nor shall it be deemed incorporated by
reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except
as expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits.
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Exhibit No.
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Description |
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99.1
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Press release furnished by Questcor
Pharmaceuticals, Inc. dated May 9, 2006, relating to the
Companys results for the quarter ended March 31, 2006, referred to in Item 2.02 above. |
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report
to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: May 9, 2006
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QUESTCOR PHARMACEUTICALS, INC. |
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By: |
/s/ JAMES L. FARES
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James L. Fares |
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President and Chief Executive Officer |
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EXHIBIT INDEX
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Exhibit No. |
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Description |
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99.1
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Press release furnished by Questcor Pharmaceuticals, Inc. dated May 9, 2006, relating to the
Companys results for the quarter ended March 31, 2006. |
exv99w1
Exhibit 99.1
FOR IMMEDIATE RELEASE
QUESTCOR ANNOUNCES FINANCIAL RESULTS FOR THE FIRST QUARTER OF 2006
Net sales of Acthar Gel increase 39% over fourth quarter of 2005
Union City, CA May 9, 2006 Questcor Pharmaceuticals, Inc. (AMEX:QSC) today reported its
financial results for the first quarter ended March 31, 2006. Total net product sales of H.P.
Acthar® Gel for the first quarter of 2006 were $2.0 million, up 39% from $1.4 million in
the fourth quarter of 2005. Net loss applicable to common shareholders totaled $3.0 million, or
$0.06 per common share, for the first quarter of 2006.
Questcors expanded 40 person sales force began their national detailing efforts on March 1, 2006
and are now averaging over 4,000 in-person sales calls on targeted neurologists per month.
Additionally, in April 2006, Questcor exhibited and had a significant presence at the
58th Annual American Academy of Neurology meeting.
In the first quarter, we made great strides to advance our efforts to establish Questcor as a
leading CNS focused specialty pharmaceutical company. Early prescription and sales trends for
Acthar Gel appear to validate our strategy and we look forward to these trends continuing through
the rest of the year, said James Fares, President and CEO of Questcor.
Moving forward, as demonstrated by our recent acquisition of U.S. rights to Doral®
(quazepam), our focus will continue to be on growing and capitalizing on our core assets. In
addition, we intend to evaluate additional opportunities to expand our neurology franchise and,
when appropriate, to build a promising development pipeline, he continued.
Financial Results for the Quarter Ended March 31, 2006
Questcors net loss applicable to common shareholders totaled $3.0 million, or $0.06 per common
share for the quarter ended March 31, 2006, compared to a net loss applicable to common
shareholders of $0.1 million, or $0.00 per common share, for the quarter ended March 31, 2005.
Questcors financial results for the quarter ended March 31, 2006 as compared to the quarter ended
March 31, 2005 were primarily impacted by:
Sale of Non-Core Products Questcors financial results for the first quarter of 2006 included the
net product sales of Acthar Gel. Total net product sales for the first quarter of 2005 included
the net product sales of Acthar Gel, Nascobal®, Ethamolin®,
Glofil®-125, and VSL#3®. As previously reported, Questcor sold its non-core
products Nascobal, Ethamolin, and Glofil-125 in October 2005 to focus its promotional efforts on
Acthar Gel and to provide capital for strategic transactions and on-going operations. Also, in
January 2005, Questcors agreement to promote
VSL#3 terminated. Net product sales of Acthar Gel were $2.0 million for the quarter ended March
31, 2006 as compared to total net product sales of Acthar Gel, the divested products, and VSL#3 of
$4.5 million for the quarter ended March 31, 2005.
Expansion of Questcors Sales Organization During the fourth quarter of 2005, Questcor made a
strategic decision to expand its sales organization so as to effectively cover the nationwide
audience of physicians who are current and potential high prescribers of Acthar Gel and other
products that treat CNS disorders. During the fourth quarter of 2005 and the first quarter of
2006, Questcor expanded its sales organization to 40 sales representatives and sales management.
The expanded sales organization is now trained and fully deployed. The expansion of the sales
organization was the primary factor resulting in an increase in selling, general and administrative
expenses to $4.2 million for the quarter ended March 31, 2006 as compared to $2.6 million for the
quarter ended March 31, 2005.
Elimination of Series B Preferred Stock, Debt, and Convertible Debentures In January 2006,
Questcor redeemed its outstanding Series B Preferred Stock for a cash payment of $7.8 million.
During 2005, Questcor retired its outstanding debt and convertible debentures with cash payments of
$6.2 million. The redemption of the Series B Preferred Stock and the retirement of Questcors
outstanding debt and debentures improved Questcors capital structure and eliminated dividends on
the Series B Preferred Stock and interest and amortization on the retired debt and debentures.
Dividends related to the Series B Preferred Stock, interest on the retired debt and debentures, and
amortization of deemed discount on the debentures totaled $0.5 million for the quarter ended March
31, 2005.
Quarter Ended March 31, 2006 Conference Call Questcor will be hosting a conference call to
discuss these results and the acquisition of Doral on Tuesday, May 9, 2006 at 8:30 a.m. Eastern
Time (5:30 a.m. Pacific Time). Please call the following numbers to participate: (800) 741-6056
(domestic) or (706) 679-3280 (international) and use conference ID number 8213744. Participants are
asked to call the above numbers 5-10 minutes prior to the starting time.
This call is being webcast by Thomson/CCBN and can be accessed at Questcors 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/CCBNs individual investor portal, powered by StreetEvents.
Institutional investors can access the call via Thomsons password-protected event management site,
StreetEvents (www.streetevents.com).
A telephonic replay of this call will be available from 12:00 p.m. Eastern Time on Tuesday, May 9,
2006 through 11:59 p.m. Eastern Time on Tuesday, May 16, 2006. Please call (800) 642-1687
(domestic) or (706) 645-9291 (international) and use conference ID number 8213744.
About Questcor Questcor Pharmaceuticals, Inc.® (AMEX: QSC) is a specialty
pharmaceutical company that develops and commercializes novel therapeutics for the treatment of
neurological disorders. Questcor currently markets H.P. Acthar® Gel (repository
corticotropin injection), an injectable drug indicated for the treatment of exacerbations
associated with Multiple Sclerosis and Doral® (quazepam) that is indicated for the
treatment of insomnia, characterized by difficulty in falling asleep, frequent nocturnal
awakenings, and/or early morning awakenings. For more information, please visit www.questcor.com.
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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 Questcors results to differ from those reported herein. Factors
that may cause such differences include, but are not limited to, Questcors ability to accurately
forecast and create the demand for its products, the gross margin achieved from the sale of its
products, Questcors ability to enforce its product returns policy, the accuracy of the
prescription data purchased from independent third parties by Questcor, the sell-through by
Questcors distributors, the inventories carried by Questcors distributors, and the expenses and
other cash needs for the upcoming periods, Questcors ability to obtain finished goods from its
sole source contract manufacturers on a timely basis if at all, Questcors potential future need
for additional funding, Questcors ability to utilize its net operating loss carry forwards to
reduce income taxes on the sale of its products, uncertainties regarding Questcors intellectual
property and other research, development, marketing and regulatory risks, and to the ability of
Questcor to implement its strategy and acquire products and, if acquired, to market them
successfully as well as the risks discussed in Questcors annual report on Form 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
Questcors 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.
CONTACT INFORMATION:
Eric Liebler, Nisola, LLC.
908-437-1320
eliebler@nisola.com
Table to follow on next page.
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Questcor Pharmaceuticals, Inc.
Selected Consolidated Balance Sheet Information
(In thousands)
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March 31, |
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December 31, |
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2006 |
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2005 |
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Cash, cash equivalents and short-term investments |
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$ |
15,176 |
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$ |
26,577 |
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Working capital |
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13,743 |
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16,121 |
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Total assets |
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20,405 |
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31,348 |
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Preferred stock, Series A |
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5,081 |
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5,081 |
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Shareholders equity |
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8,834 |
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11,422 |
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Questcor Pharmaceuticals, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
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Three Months Ended |
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March 31, |
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2006 |
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2005 |
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Net product sales |
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$ |
2,010 |
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$ |
4,498 |
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Operating costs and expenses: |
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Cost of product sales (exclusive of amortization of
purchased technology) |
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626 |
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748 |
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Selling, general and administrative |
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4,170 |
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2,618 |
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Research and development |
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380 |
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499 |
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Depreciation and amortization |
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46 |
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311 |
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Total operating costs and expenses |
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5,222 |
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4,176 |
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Income (loss) from operations |
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(3,212 |
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322 |
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Other income (expense): |
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Non-cash amortization of deemed discount on convertible debentures |
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(108 |
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Interest income |
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181 |
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35 |
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Interest expense |
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(139 |
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Rental income (expense), net |
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(6 |
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43 |
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Other income (expense), net |
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175 |
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(169 |
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Net income (loss) |
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(3,037 |
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153 |
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Non-cash deemed dividend related to beneficial conversion feature of Series B
preferred stock |
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84 |
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Dividends on Series B preferred stock |
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168 |
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Net loss applicable to common shareholders |
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$ |
(3,037 |
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$ |
( 99 |
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Net loss per common share applicable to common shareholders basic and diluted |
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$ |
(0.06 |
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$ |
0.00 |
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Shares used in computing net loss per share applicable to common shareholders
basic and diluted |
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54,562 |
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51,216 |
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In addition to disclosing financial results prepared in accordance with accounting principles
generally accepted in the United States (GAAP), Questcor is disclosing information regarding
EBITDA, which is defined as earnings before net interest income (expense), taxes, depreciation and
amortization, and non-cash amortization of deemed discount on convertible debentures. As required
by the SEC concerning the use of non-GAAP measures, Questcor is providing the following
reconciliation to net income (loss), which is the most directly comparable GAAP measure. Questcor
presents EBITDA because it is a common alternative measure of performance that is used by
management as well as investors when analyzing the financial position and operating performance of
the Company. As EBITDA is a non-GAAP financial measure, it should not be considered in isolation
or as a substitute for net income (loss) or any other GAAP measure. Because all companies do not
calculate EBITDA in the same manner, Questcors definition of EBITDA may not be consistent with
that of other companies.
Questcor Pharmaceuticals, Inc.
Reconciliation of GAAP Net Income (Loss) to Non-GAAP EBITDA
(In thousands)
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Three Months Ended |
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March 31, |
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2006 |
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2005 |
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GAAP net income (loss) |
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$ |
(3,037 |
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$ |
153 |
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Adjustments: |
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Net interest (income) expense |
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(181 |
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104 |
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Depreciation and amortization |
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46 |
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311 |
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Non-cash amortization of deemed
discount on convertible debentures |
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108 |
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Non-GAAP EBITDA Positive (Negative) |
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$ |
(3,172 |
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$ |
676 |
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