ANAHEIM, Calif., April 28, 2014 /PRNewswire/ -- Questcor
Pharmaceuticals, Inc. (NASDAQ: QCOR) today reported financial
results for the first quarter ended March
31, 2014.
|
Three
Months Ended 03/31/14
|
Three
Months Ended 03/31/13
|
Percentage
Change
|
Net Sales
|
$227.1
Million
|
$135.1
Million
|
68%
|
GAAP Diluted
EPS
|
$1.20
|
$0.65
|
85%
|
Non-GAAP Diluted
EPS
|
$1.40
|
$0.76
|
84%
|
Net sales for the first quarter ended March 31, 2014 were $227.1
million, up 68 percent from $135.1
million in the first quarter of 2013. The increase was
driven by the expanded usage of H.P. Acthar® Gel
(repository corticotropin injection) in multiple therapeutic areas.
The significant increase in net sales was primarily driven by
rheumatologists prescribing Acthar for patients suffering from
dermatomyositis, polymyositis, rheumatoid arthritis, and systemic
lupus erythematosus. BioVectra, the Company's specialty
manufacturing subsidiary, had net sales of $17.3 million in the first quarter of 2014, an
increase of 106 percent from $8.4
million in the first quarter of 2013. GAAP earnings for the
first quarter of 2014 were $1.20 per
diluted common share, up 85 percent from the year ago quarter.
First quarter 2014 non-GAAP earnings per share were $1.40, an increase of 84 percent from the prior
year period.
Questcor shipped 7,080 vials of Acthar during the first quarter
of 2014 compared with 4,830 vials in the year ago quarter, an
increase of 47 percent. Quarterly vial shipments continue to be
subject to significant variation due to the size and timing of
individual orders received from Questcor's distributor. The timing
of when these orders are received and filled can significantly
affect net sales and net income in any particular quarter. The
Company believes that investors should consider the Company's
results over several quarters when analyzing the Company's
performance.
"As discussed during the April 7,
2014 investor call announcing our transaction with
Mallinckrodt plc, our results were in
line with the seasonal patterns we typically see.
Purportedly, incidence of multiple sclerosis (MS) exacerbations can
be lower during the winter months. In addition, annual January
insurance plan reenrollment activities tend to temporarily slow
down the prescription reimbursement process for some specialty
drugs during the first calendar quarter," said Don M. Bailey, President and CEO of Questcor.
"Similar to 2013, Acthar prescription activity was relatively soft
in January and February but picked up significantly during March
and April."
"New paid prescriptions for Acthar were between 2,325 and 2,350
in the first quarter, an increase of approximately 35% compared
with the first quarter of 2013 and a decrease of about 6%
sequentially, reflecting the aforementioned seasonality," commented
Steve Cartt, Chief Operating Officer
of Questcor. "Of particular note, in the FDA-approved
rheumatology-related indications, pharmacies filled between 570 and
580 new paid Acthar prescriptions during the first quarter, up
significantly from 140 to 150 prescriptions filled in the year ago
quarter and up about 8% sequentially. Rheumatology prescriptions
now account for nearly a third of our total Acthar business after
only four full quarters of educating rheumatologists about Acthar.
In addition, our pilot commercial effort focused on educating
pulmonologists about Acthar in the treatment of respiratory
manifestations of symptomatic sarcoidosis appears to be generating
encouraging early results."
Pharmacies also filled between 350 and 360 new paid
prescriptions for Nephrotic Syndrome (NS) in the quarter, a
decrease of about 10% year-over-year and sequentially. Net
sales resulting from NS prescriptions currently account for
approximately a third of Questcor's Acthar business. During the
first quarter, pharmacies filled between 1,150 and 1,160 new paid
prescriptions for MS relapse patients, representing an increase of
about 13% year-over-year and a 14% sequential decrease. Net sales
generated from MS relapse prescriptions currently represent
approximately 25% of the Acthar business. Pharmacies filled between
215 and 220 new paid prescriptions for Infantile Spasm during the
quarter, an increase of about 39% year-over-year, and 20%
sequentially.
The Company believes that insurance coverage for Acthar
continues to remain favorable when Acthar is prescribed for
patients in need of an FDA-approved treatment alternative.
To allow comparable analysis, the Company has defined "new paid"
prescriptions in the above paragraphs to include prescriptions
covered by commercial carriers, Medicare, Medicaid and Tricare in
all periods regardless of the rebate percentage applicable in those
periods. The numbers are based on internal company estimates.
Research and Development Progress
Research and development (R&D) investment increased 84
percent to $19.9 million in the three
months ended March 31, 2014, compared
with $10.8 million for the year ago
period. The increased R&D investment reflects the Company's
ongoing efforts to further build the body of clinical evidence for
Acthar, clarify the potential immune-modulating properties of
Acthar and Synacthen, and identify mechanisms of action that could
be potentially applicable to other inflammatory and auto-immune
diseases with high unmet medical needs. The Company is also
identifying new patient populations in which to evaluate both
Acthar and Synacthen through exploratory clinical studies. Questcor
is presently funding research and development for the following
indications:
New Indications for Label Enhancement Programs:
- Amyotrophic Lateral Sclerosis (ALS): Patient enrollment
has been completed in a company-sponsored dose-ranging Phase 2
clinical trial to evaluate the safety and tolerability of Acthar in
patients with ALS, often referred to as Lou
Gehrig's disease. ALS is a life-threatening, progressive
neurodegenerative disease that affects nerve cells in the brain and
the spinal cord.
- Diabetic Nephropathy: Enrollment continues in a
company-sponsored Phase 2 trial to evaluate the efficacy and safety
of Acthar in patients with diabetic nephropathy, one of the most
common causes of end-stage renal disease in the United States.
- Acute Respiratory Distress Syndrome (ARDS): Site
selection has been initiated for a Phase 2 study to explore the
safety and efficacy of Acthar in patients with ARDS. ARDS is an
acute life threatening lung condition that can result from
pulmonary and non-pulmonary infections or a multitude of other
serious conditions.
Research Regarding Approved Indications:
- Idiopathic Membranous Nephropathy: Enrollment continues
in a company-sponsored Phase 4 trial in idiopathic membranous
nephropathy. Patients enrolled in this study are refractory, or
non-responsive, to current standard therapies or have relapsed
after partial remission on current standard therapies. (NOTE: for
clarity, this trial is separate and distinct from the independent
investigator-initiated study in idiopathic membranous nephropathy
patients discussed in Questcor's April 21,
2014 press release.)
- Lupus: Enrollment continues in a company-sponsored
multi-site Phase 4 clinical trial to evaluate the efficacy and
safety of daily Acthar administration during a 6-month period in
patients with persistently active lupus.
Preclinical work related to the evaluation of a select group of
potential Synacthen indications is in process.
Cash, Share Repurchase Program and Dividends
Cash flow from operations was $106
million during the first quarter of 2014 compared to
$41 million during the first quarter
of 2013. As of April 18, 2014,
Questcor had cash, cash equivalents and short-term investments of
$398.1 million, including
$75 million in restricted cash to
secure certain post-closing payment obligations related to
Questcor's acquisition of Synacthen. There were no share
repurchases during the first quarter of 2014 and, as of
March 31, 2014, there are
approximately 5.3 million authorized shares remaining under the
stock repurchase plan. Diluted shares outstanding for the three
months ended March 31, 2014 were 61.8
million shares.
Last week, Questcor paid its second quarter dividend of
$0.30 per share. Additionally,
the Company announced on April 7,
2014 that its Board of Directors declared a quarterly cash
dividend of $0.30 per share. The
dividend will be paid on or about July 8,
2014 to shareholders of record at the close of business on
July 1, 2014.
Definitive Merger Agreement with Mallinckrodt
Pharmaceuticals
On April 7, 2014, Questcor
announced that it had entered into a definitive merger agreement
under which Mallinckrodt will acquire
Questcor in a transaction valued, based on the closing price of
Mallinckrodt common stock on
April 4, 2014, at approximately
$5.6 billion. Under the terms
of the transaction, Questcor shareholders will receive $30.00 per share in cash and 0.897 Mallinckrodt shares for each share of Questcor
common stock they own. Following completion of the merger,
Mallinckrodt shareholders will own
approximately 50.5% and former Questcor shareholders will own
approximately 49.5% of the combined company's stock. The
joint proxy and registration statement for the proposed merger is
expected to be filed with the SEC sometime in mid-May 2014.
The transaction, which is currently expected to be completed in the
third calendar quarter of 2014, is subject to the approval of the
shareholders of both companies, as well as Hart-Scott-Rodino
clearance in the U.S. In light of the pending transaction,
Questcor has suspended conducting quarterly conference calls.
The Company expects to file its first quarter 2014 Form 10-Q on or
before April 30, 2014.
Acthar Label Information
The product label for Acthar includes 19 FDA-approved
indications. Substantially all of the Company's net sales currently
result from Acthar prescriptions for the following on-label
indications:
- Nephrotic Syndrome (NS): "to induce a diuresis or a
remission of proteinuria in the nephrotic syndrome without uremia
of the idiopathic type or that due to lupus erythematosus." NS can
result from several underlying conditions, and prescribing
physicians indicate that Acthar is most commonly being prescribed
for patients who have proteinuria and suffer from NS due to
idiopathic membranous nephropathy, focal segmental
glomerulosclerosis (FSGS), IgA nephropathy, minimal change disease
and lupus nephritis.
- Rheumatology Related Conditions: Acthar is approved for
the following rheumatology related conditions: (i) Collagen
Diseases: Acthar is indicated "during an exacerbation or as
maintenance therapy in selected cases of systemic lupus
erythematosus, systemic dermatomyositis (polymyositis)" and (ii)
Rheumatic Disorders: Acthar is indicated as "adjunctive therapy for
short-term administration (to tide the patient over an acute
episode or exacerbation) in: Psoriatic arthritis, Rheumatoid
arthritis, including juvenile rheumatoid arthritis (selected cases
may require low-dose maintenance therapy), Ankylosing
spondylitis."
- Multiple Sclerosis (MS): "for the treatment of acute
exacerbations of multiple sclerosis in adults. Clinical controlled
trials have shown H.P. Acthar Gel to be effective in speeding the
resolution of acute exacerbations of multiple sclerosis. However,
there is no evidence that it affects the ultimate outcome or
natural history of the disease." When Acthar is used, it is
typically prescribed as second line treatment for patients with MS
exacerbations.
- Infantile Spasms (IS): "as monotherapy for the treatment
of infantile spasms in infants and children under 2 years of
age."
Non-GAAP Financial Measures
The Company believes it is important to share non-GAAP financial
measures with investors as these measures may better represent the
ongoing economics of the business and reflect how we manage the
business. Accordingly, management believes investors' understanding
of the Company's financial performance is enhanced as a result of
the disclosure of these non-GAAP financial measures. Non-GAAP
financial measures should not be viewed in isolation, or as a
substitute for, or as superior to, reported GAAP financial
measures. The reconciliation between GAAP and non-GAAP financial
measures are provided with the financial tables included with this
release.
About Questcor
Questcor Pharmaceuticals, Inc. is a biopharmaceutical company
focused on the treatment of patients with serious,
difficult-to-treat autoimmune and inflammatory disorders. Questcor
also provides specialty contract manufacturing services to the
global pharmaceutical industry through its wholly-owned subsidiary
BioVectra Inc. For more information about Questcor, please visit
www.questcor.com.
Note: Except for the historical information contained herein,
this press release contains forward-looking statements that have
been made pursuant to the Private Securities Litigation Reform Act
of 1995. These statements relate to future events or our future
financial performance. In some cases, you can identify
forward-looking statements by terminology such as "believes,"
"continue," "could," "ensuring," "estimates," "expects," "growth,"
"may," "momentum," "plans," "potential," "remain," "should,"
"start," "substantial," "sustainable" or "will" or the negative of
such terms and other comparable terminology. These statements are
only predictions. Actual events or results may differ materially.
Factors that could cause or contribute to such differences include,
but are not limited to, the following:
Factors related to the Mallinckrodt Transaction
- The fixed exchange ratio results in a floating value to be
received by Questcor shareholders;
- Dilution of ownership for Questcor's shareholders;
- The possibility that the merger will not be consummated;
- The impact of the announcement of the transaction on our
operations;
- Provisions of the merger agreement that could discourage a
potential competing acquirer of Questcor
Factors related to our Business
- Our reliance on Acthar for substantially all of our net sales
and profits;
- Reductions in vials used per prescription resulting from
changes in treatment regimens by physicians or patient compliance
with physician recommendations;
- Our ability to receive high reimbursement levels from third
party payers;
- The complex nature of our manufacturing process and the
potential for supply disruptions or other business
disruptions;
- The lack of patent protection for Acthar; and the possible FDA
approval and market introduction of additional competitive
products;
- Our ability to continue to generate revenue from sales of
Acthar to treat on-label indications associated with NS,
rheumatology-related conditions, MS, or IS, and our ability to
develop other therapeutic uses for Acthar;
- Research and development risks, including risks associated with
Questcor's work in the area of NS and Lupus, efforts to develop and
obtain FDA approval of Synacthen, our reliance on third-parties to
conduct research and development, our ability to conduct our own
clinical trial research and development projects, and the ability
of research and development to generate successful results;
- The results of any pending or future litigation, investigations
or claims, including government investigations and private
securities litigation;
- Our ability to comply with federal and state regulations,
including regulations relating to pharmaceutical sales and
marketing practices;
- Regulatory changes or other policy actions by governmental
authorities and other third parties in connection with U.S. health
care reform or efforts to reduce federal and state government
deficits;
- An increase in the proportion of our Acthar unit sales
comprised of Medicaid-eligible patients and government
entities;
- Our ability to estimate reserves required for Acthar used by
government entities and Medicaid-eligible patients and the impact
that unforeseen invoicing of historical Medicaid prescriptions may
have upon our results;
- Our ability to effectively manage our growth, including the
expansion of our sales forces, planned international expansion, and
our reliance on key personnel;
- Our ability to successfully identify, acquire or integrate
acquisition targets or other business combinations;
- Our ability to integrate the BioVectra business with our
business and to manage, and grow, a contract manufacturing
business;
- Our ability to comply with foreign regulations related to the
operation of BioVectra's business and the international sales of
Synacthen;
- The impact to our business caused by economic conditions;
- Our ability to protect our trade secrets and other proprietary
rights;
- The risk of product liability lawsuits;
- Our ability to successfully enter into, and operate in,
international markets;
- The risk of unfavorable changes in currency exchange
rates;
- Unforeseen business interruptions and security breaches;
- Volatility in Questcor's Acthar shipments, estimated channel
inventory, and end-user demand, as well as volatility in our stock
price;
- Our ability and willingness to continue to pay our quarterly
dividend or make future increases in our quarterly dividend;
and
- Other risks discussed in Questcor's annual report on Form 10-K
for the year ended December 31, 2013
as filed with the Securities and Exchange Commission, or SEC, on
February 26, 2014, and other
documents filed with the SEC.
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 of this
release.
For more information, please visit www.questcor.com or
www.acthar.com.
QUESTCOR
PHARMACEUTICALS, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME
(In thousands, except
net income per share data)
(unaudited)
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2014
|
|
2013
|
Revenue
|
|
|
|
|
Pharmaceutical net sales
|
|
$
|
209,768
|
|
$
|
126,771
|
Contract
manufacturing net sales
|
|
17,336
|
|
8,358
|
Total
net sales
|
|
227,104
|
|
135,129
|
Cost of
sales (exclusive of amortization of purchased
technology)
|
|
21,410
|
|
16,189
|
Gross
profit
|
|
205,694
|
|
118,940
|
Operating expenses:
|
|
|
|
|
Selling
and marketing
|
|
47,067
|
|
35,461
|
General
and administrative
|
|
22,627
|
|
12,548
|
Research
and development
|
|
19,929
|
|
10,793
|
Depreciation and amortization
|
|
1,027
|
|
1,070
|
Change
in fair value of contingent consideration
|
|
2,024
|
|
505
|
Impairment of goodwill and intangibles
|
|
—
|
|
719
|
Total
operating expenses
|
|
92,674
|
|
61,096
|
Income from
operations
|
|
113,020
|
|
57,844
|
Interest and other
income, net
|
|
51
|
|
163
|
Foreign currency
transaction loss
|
|
(154)
|
|
(488)
|
Income before income
taxes
|
|
112,917
|
|
57,519
|
Income tax
expense
|
|
38,607
|
|
18,455
|
Net income
|
|
$
|
74,310
|
|
$
|
39,064
|
Change in unrealized
gains or losses on available-for-sale securities, net of related
tax effects and changes in foreign currency translation
adjustments.
|
|
(1,231)
|
|
(1,194)
|
Comprehensive
income
|
|
$
|
73,079
|
|
$
|
37,870
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
Basic
|
|
$
|
1.26
|
|
$
|
0.68
|
Diluted
|
|
$
|
1.20
|
|
$
|
0.65
|
Shares used in
computing net income per share:
|
|
|
|
|
Basic
|
|
59,141
|
|
57,857
|
Diluted
|
|
61,822
|
|
60,271
|
|
|
|
|
|
Dividends declared
per share of common stock
|
|
$
|
0.30
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP Adjusted Financial Disclosure
|
|
|
|
|
Adjusted net
income
|
|
$
|
86,357
|
|
$
|
45,832
|
Share-based
compensation expense (1)
|
|
(7,102)
|
|
(4,162)
|
Depreciation and
amortization expense (2)
|
|
(3,174)
|
|
(1,447)
|
Other non-cash
expense (income) related to acquisition of BioVectra (3)
|
|
(656)
|
|
(672)
|
Other non-cash
expense (income) related to acquisition of Synacthen (4)
|
|
(1,115)
|
|
—
|
Impairment of
goodwill and intangibles (5)
|
|
—
|
|
(487)
|
Net income –
GAAP
|
|
$74,310
|
|
$39,064
|
|
|
|
|
|
Adjusted net income
per share – basic
|
|
$
|
1.46
|
|
$
|
0.79
|
Share-based
compensation expense (1)
|
|
(0.12)
|
|
(0.07)
|
Depreciation and
amortization expense (2)
|
|
(0.05)
|
|
(0.03)
|
Other non-cash
expense (income) related to acquisition of BioVectra (3)
|
|
(0.01)
|
|
(0.01)
|
Other non-cash
expense (income) related to acquisition of Synacthen (4)
|
|
(0.02)
|
|
—
|
Impairment of
goodwill and intangibles (5)
|
|
—
|
|
(0.01)
|
Net income per share
– basic
|
|
$
|
1.26
|
|
$
|
0.68
|
|
|
|
|
|
Adjusted net income
per share – diluted
|
|
$
|
1.40
|
|
$
|
0.76
|
Share-based
compensation expense (1)
|
|
(0.11)
|
|
(0.07)
|
Depreciation and
amortization expense (2)
|
|
(0.05)
|
|
(0.02)
|
Other non-cash
expense (income) related to acquisition of BioVectra (3)
|
|
(0.01)
|
|
(0.01)
|
Other non-cash
expense (income) related to acquisition of Synacthen (4)
|
|
(0.02)
|
|
—
|
Impairment of
goodwill and intangibles (5)
|
|
—
|
|
(0.01)
|
Net income per share
– diluted
|
|
$
|
1.20
|
|
$
|
0.65
|
|
|
|
|
|
|
Notes to
Reconciliation of Non-GAAP Adjusted Financial
Disclosure
|
Net income per share
– basic and diluted may not foot due to rounding.
|
Use of Non-GAAP
Financial Measures
|
Our "non-GAAP
adjusted net income" excludes the following items from GAAP net
income:
|
1. Share-based
compensation expense.
|
2. Depreciation and
amortization expense, including amortization expense on our
purchased intangibles.
|
3. Expense associated
with the net present value adjustment of our contingent
consideration.
|
4. Expense associated
with the net present value adjustment on the R&D liability in
conjunction with acquisition of Synacthen.
|
5. Impairment
of purchased technology related to our acquisition of
Doral.
|
|
QUESTCOR
PHARMACEUTICALS, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In thousands, except
share information)
(unaudited)
|
|
|
|
March 31,
2014
|
|
December 31,
2013
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and
cash equivalents
|
|
$
|
261,102
|
|
$
|
175,840
|
Short-term investments
|
|
75,021
|
|
69,166
|
Total
cash, cash equivalents and short-term investments
|
|
336,123
|
|
245,006
|
Accounts
receivable, net of allowances for doubtful accounts of $407 and
$475 at March 31, 2014 and December 31, 2013,
respectively
|
|
97,331
|
|
87,069
|
Inventories, net of allowances of $1,848 and $1,329 at March 31,
2014 and December 31, 2013, respectively
|
|
15,197
|
|
16,368
|
Restricted cash - current portion
|
|
25,000
|
|
25,000
|
Prepaid
expenses and other current assets
|
|
8,228
|
|
7,124
|
Deferred
tax assets
|
|
12,601
|
|
16,209
|
Total
current assets
|
|
494,480
|
|
396,776
|
Property and
equipment, net
|
|
31,250
|
|
31,733
|
Goodwill
|
|
19,790
|
|
20,464
|
In process R&D
asset
|
|
188,988
|
|
191,451
|
Intangibles and other
non current assets, net
|
|
28,350
|
|
30,131
|
Restricted
cash
|
|
50,000
|
|
50,000
|
Deposits and other
assets
|
|
128
|
|
389
|
Deferred tax
assets
|
|
15,410
|
|
15,410
|
Total
assets
|
|
$
|
828,396
|
|
$
|
736,354
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
22,219
|
|
$
|
14,302
|
Accrued
compensation
|
|
14,314
|
|
16,489
|
Sales-related reserves
|
|
33,790
|
|
35,370
|
Accrued
royalties
|
|
35,941
|
|
35,163
|
Dividend
payable
|
|
18,285
|
|
18,093
|
Current
portion of contingent consideration
|
|
8,293
|
|
4,238
|
Current
portion of in process R&D liability
|
|
25,000
|
|
25,000
|
Income
taxes payable
|
|
22,175
|
|
3,693
|
Current
portion of long-term debt
|
|
1,627
|
|
1,665
|
Other
accrued liabilities
|
|
6,400
|
|
7,159
|
Total
current liabilities
|
|
188,044
|
|
161,172
|
Long-term debt, less
current portion
|
|
13,124
|
|
13,998
|
Contingent
consideration
|
|
28,775
|
|
33,224
|
In process R&D
liability
|
|
116,761
|
|
115,066
|
Non current deferred
tax liability
|
|
10,221
|
|
10,569
|
Other non current
liabilities
|
|
2,674
|
|
2,961
|
Total
liabilities
|
|
359,599
|
|
336,990
|
Shareholders'
equity:
|
|
|
|
|
Preferred stock, no par value, 5,334,285 shares authorized; none
outstanding
|
|
—
|
|
—
|
Common
stock, no par value, 105,000,000 shares authorized, 60,977,015 and
60,137,758 shares issued and outstanding at March 31, 2014 and
December 31, 2013, respectively
|
|
45,042
|
|
30,386
|
Retained
earnings
|
|
428,239
|
|
372,231
|
Accumulated other comprehensive (loss) income
|
|
(4,484)
|
|
(3,253)
|
Total
shareholders' equity
|
|
468,797
|
|
399,364
|
Total
liabilities and shareholders' equity
|
|
$
|
828,396
|
|
$
|
736,354
|
QUESTCOR
PHARMACEUTICALS, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
thousands)
(unaudited)
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2014
|
|
2013
|
OPERATING
ACTIVITIES
|
|
|
|
|
Net income
|
|
$
|
74,310
|
|
$
|
39,064
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Share-based
compensation expense
|
|
8,696
|
|
6,148
|
Deferred income
taxes
|
|
3,604
|
|
411
|
Amortization of
investments
|
|
261
|
|
182
|
Depreciation and
amortization
|
|
4,823
|
|
2,137
|
Impairment of
goodwill and intangibles
|
|
—
|
|
719
|
Loss on disposal of
property and equipment
|
|
—
|
|
21
|
Imputed interest for
contingent consideration and in-process R&D
|
|
2,024
|
|
290
|
Other compensation
expense
|
|
514
|
|
215
|
Changes in operating
assets and liabilities, net of business acquisition:
|
|
|
|
|
Accounts
receivable
|
|
(8,838)
|
|
8,718
|
Inventories
|
|
893
|
|
4,637
|
Prepaid expenses and
other current assets
|
|
(1,114)
|
|
(198)
|
Accounts
payable
|
|
6,272
|
|
(384)
|
Accrued
compensation
|
|
(2,175)
|
|
(15,211)
|
Sales-related
reserves
|
|
(1,580)
|
|
(11,546)
|
Accrued
royalties
|
|
778
|
|
(21)
|
Income taxes
payable
|
|
18,486
|
|
5,643
|
Other accrued
liabilities
|
|
(837)
|
|
559
|
Other non-current
liabilities
|
|
(43)
|
|
68
|
Net cash flows
provided by operating activities
|
|
106,074
|
|
41,452
|
INVESTING
ACTIVITIES
|
|
|
|
|
Purchase of property
and equipment
|
|
(2,252)
|
|
(562)
|
Purchase of
short-term investments
|
|
(21,233)
|
|
(33,539)
|
Proceeds from
maturities of short-term investments
|
|
15,124
|
|
30,038
|
Acquisition of
BioVectra, net of cash acquired
|
|
—
|
|
(46,692)
|
Deposits and other
assets
|
|
437
|
|
—
|
Net cash flows used
in investing activities
|
|
(7,924)
|
|
(50,755)
|
FINANCING
ACTIVITIES
|
|
|
|
|
Repayment of funded
long-term debt
|
|
(291)
|
|
(304)
|
Repayment of other
long-term debt
|
|
(116)
|
|
(119)
|
Income tax benefit
realized from share-based compensation plans
|
|
10,025
|
|
1,991
|
Issuance of common
stock, net
|
|
(4,065)
|
|
2,615
|
Dividends
paid
|
|
(18,110)
|
|
—
|
Net cash flows (used
in) / provided by financing activities
|
|
(12,557)
|
|
4,183
|
Effect of cash on
changes in exchange rates
|
|
(331)
|
|
(84)
|
Increase
(decrease) in cash and cash equivalents
|
|
85,262
|
|
(5,204)
|
Cash and cash
equivalents at beginning of period
|
|
175,840
|
|
80,608
|
Cash and cash
equivalents at end of period
|
|
$
|
261,102
|
|
$
|
75,404
|
Supplemental
Disclosures of Cash Flow Information:
|
|
|
|
|
Cash paid for
interest
|
|
$
|
152
|
|
$
|
182
|
Cash paid for income
taxes
|
|
$
|
6,205
|
|
$
|
9,707
|
Supplemental
Disclosures of Investing and Financing Activities:
|
|
|
|
|
Dividend
payable
|
|
$
|
18,285
|
|
$
|
14,751
|
Important Information for Investors and Shareholders
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. In connection with the
proposed transaction between Mallinckrodt and Questcor, Mallinckrodt will file with the Securities and
Exchange Commission (the "SEC") a registration statement on Form
S-4 that will include a joint proxy statement of Mallinckrodt and Questcor that also constitutes a
prospectus of Mallinckrodt. The
definitive joint proxy statement/prospectus will be delivered to
shareholders of Mallinckrodt and
Questcor. INVESTORS AND SECURITY HOLDERS OF MALLINCKRODT AND
QUESTCOR ARE URGED TO READ THE DEFINITIVE JOINT PROXY
STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT WILL BE FILED WITH
THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and
security holders will be able to obtain free copies of the
registration statement and the definitive joint proxy
statement/prospectus (when available) and other documents filed
with the SEC by Mallinckrodt and
Questcor through the website maintained by the SEC at
http://www.sec.gov. Copies of the documents filed with the SEC by
Mallinckrodt will be available free of
charge on Mallinckrodt's internet
website at www.mallinckrodt.com or by contacting Mallinckrodt's Investor Relations Department at
(314) 654-6650. Copies of the documents filed with the SEC by
Questcor will be available free of charge on Questcor's internet
website at www.questcor.com or by contacting Questcor's Investor
Relations Department at (714) 497-4899.
Participants in the Merger Solicitation
Mallinckrodt, Questcor, their
respective directors and certain of their executive officers and
employees may be considered participants in the solicitation of
proxies in connection with the proposed transaction. Information
regarding the persons who may, under the rules of the SEC, be
deemed participants in the solicitation of the Mallinckrodt and Questcor shareholders in
connection with the proposed merger and a description of their
direct and indirect interests, by security holdings or otherwise,
will be set forth in the joint proxy statement/prospectus when it
is filed with the SEC. Information about the directors and
executive officers of Mallinckrodt is
set forth in its proxy statement for its 2014 annual meeting of
shareholders, which was filed with the SEC on January 24, 2014 . Information about the
directors and executive officers of Questcor is set forth in its
proxy statement for its 2013 annual meeting of shareholders, which
was filed with the SEC on April 15,
2013.
SOURCE Questcor Pharmaceuticals, Inc.