Back to top

Analyst Blog

Zacks Equity Research

Questcor Set to Acquire BioVectra

VRX QCOR

 ZacksTrade Now

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Questcor Pharmaceuticals Inc. (QCOR - Analyst Report) recently announced that it has entered into an agreement to acquire all the shares of BioVectera Inc., for an immediate cash payment of CAD 50 million ($50.72 million). Stakeholders of BioVectra could also receive up to an additional CAD $50 million, on the basis of its financial results in the next three years. The acquisition is expected to be completed during this month.

Questcor and BioVectra have had a long association with BioVectra manufacturing the active product ingredient (API) for Questcor's H.P. Acthar Gel. With this acquisition, Questcor will gain access to Acthar’s manufacturing trade secrets for Acthar. The acquisition would enable the company to meet the continuing demand for Acthar, strengthen its technical and scientific expertise, and allow international expansion.

Our Take

We are positive on the upcoming acquisition of BioVectra, which is expected to be immediately accretive to earnings. The deal provides vertical integration and will help strengthen the Acthar manufacturing process. BioVectra’s sales in the fiscal year ended Aug 31, 2012, were $28 million, up 15%.

Acthar, an injectable drug, is the lead product at Questcor. It is approved by the FDA for nineteen indications. The company’s other product is Doral (insomnia).

We currently have a Neutral recommendation on Questcor, which carries a Zacks #3 Rank (Hold). We expect investor focus to remain on reimbursement issues related to Acthar as well as the investigation being conducted by the United States Attorney's Office for the Eastern District of Pennsylvania (USAO) regarding the company’s promotional practices.

Pharma companies that currently seem to be in a better position include Valeant Pharmaceuticals International Inc. (VRX - Snapshot Report)), which carries a Zacks #1 Rank (Strong Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%