Back to top

Analyst Blog

Questcor Pharmaceuticals Inc. recently announced that it has completed the  acquisition of BioVectera Inc. for an immediate cash payment of CAD 50 million ($50.40 million approximately). 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.

Questcor and BioVectra have had a long association with the latter 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 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 as many as 19 indications. The company’s other product is Doral (insomnia). 5,590 vials of Acthar were shipped during the third quarter of 2012, up 92% year over year.

We currently have a Neutral recommendation on Questcor, which carries a Zacks Rank #3 (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 - Analyst Report), which carries a Zacks Rank #1 (Strong Buy).  Other companies performing well are BioCryst Pharmaceuticals, Inc. (BCRX - Snapshot Report) and Anacor Pharmaceuticals, Inc. (ANAC - Snapshot Report), which carry a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

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 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
CENTURY ALU… CENX 22.53 +4.50%
ERBA DIAGNO… ERB 2.91 +4.30%
PLANAR SYST… PLNR 4.31 +3.86%
MALLINCKROD… MNK 72.17 +3.83%
GTT COMMUNI… GTT 12.06 +3.52%