Questcor Reports Fourth Quarter and Full Year 2012 Results

          Questcor Reports Fourth Quarter and Full Year 2012 Results

- Net Sales, EPS and Cash Flow from Operations Increase Significantly Over
Prior Year Period -

- Continues to Expand R&D Efforts -

- Increases Quarterly Dividend 25% to $0.25 per share -

PR Newswire

ANAHEIM, Calif., Feb. 26, 2013

ANAHEIM, Calif., Feb. 26, 2013 /PRNewswire/ --Questcor Pharmaceuticals, Inc.
(NASDAQ: QCOR) today reported financial results for the fourth quarter and
full year ended December 31, 2012.

                 Three Months Ended       Three Months Ended Percentage Change
                 12/31/12                 12/31/11
Net Sales        $160.5 Million           $75.5 Million      113%
GAAP Diluted EPS $1.03                    $0.48              115%
Non-GAAP Diluted $1.09                    $0.47              132%
EPS



                     Year Ended 12/31/12 Year Ended 12/31/11 Percentage Change
Net Sales            $509.3 Million      $218.2 Million      133%
GAAP Diluted EPS     $3.14               $1.21               160%
Non-GAAP Diluted EPS $3.33               $1.27               162%

Net sales for the fourth quarter of 2012 were $160.5 million, compared to
$75.5 million for the same period in 2011. Net sales increased primarily due
to expanded prescribing of H.P. Acthar^® Gel (repository corticotropin
injection) by nephrologists in the treatment of nephrotic syndrome, as well as
continued prescribing by neurologists in the treatment of MS relapses and
infantile spasms. Net sales also benefitted from the initiation of commercial
activities focused on the use of Acthar by rheumatologists in the treatment of
on-label rheumatology-related conditions.

GAAP earnings for the fourth quarter of 2012 were $1.03 per diluted common
share, compared to $0.48 per diluted common share for last year's comparable
quarter.Non-GAAP earnings for the quarter ended December 31, 2012 were $1.09
per diluted common share and exclude non-cash share-based compensation expense
and depreciation and amortization expense. Non-GAAP earnings for the year ago
quarter were $0.47 per diluted common share. Basic common share count
decreased over 5 million shares from the fourth quarter of 2011 to the fourth
quarter of 2012.

Questcor shipped 6,330 vials of Acthar during the fourth quarter 2012, up 88
percent compared to 3,360 vials in the year ago quarter.For the full year of
2012, Questcor shipped 20,741vials of Acthar, up 94 percent compared to 10,710
vials in 2011. Quarterly vial shipments are 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 fourth quarter and full year results do not reflect Questcor's acquisition
of BioVectra or the change, to be applied on a prospective basis, in the
Medicaid rebate percentage for Acthar, both of which occurred in the first
quarter of 2013.

"Net sales, net income and cash flow from operations grew sharply in the
fourth quarter compared to the prior-year period," said Don M. Bailey,
President and CEO of Questcor. "Additionally, we more than doubled our
investment in R&D in 2012 compared to 2011 as we continue to build the body of
evidence regarding the unique properties of Acthar and how it may benefit an
increasing number of patients who do not respond to other therapies."

"Acthar is most commonly prescribed by physicians as an appropriate treatment
alternative for patients with certain auto-immune conditions in whom
first-line therapies have not provided the intended treatment outcome and an
additional FDA-approved treatment alternative is needed," commented Steve
Cartt, Chief Operating Officer of Questcor. "For such patients, insurance
coverage for Acthar continues to remain favorable. Continued expanded use in
nephrotic syndrome, MS and strong growth in our newly commercialized
rheumatology indications, mainly dermatomyositis and polymyositis, contributed
to the year-over-year net sales increase in the fourth quarter. While Acthar
net sales in MS posted greater than 40% year-over-year growth, MS
prescriptions softened by approximately 8% from the third quarter, after
almost five years of sequential quarterly growth, and nephrotic syndrome
became the largest contributor to net sales. At the same time, based on early,
encouraging results from our pilot rheumatology commercial effort, we have
just completed our rheumatology sales force expansion from 12 to 55
representatives."

"We continue to invest in the future of both Acthar and our overall business
capabilities," continued Mr. Bailey. "In addition to the rapid expansion of
our R&D investment, we have also substantially expanded our sales force, our
reimbursement and compliance teams, and our manufacturing capabilities. The
recent acquisition of BioVectra, which gives us much greater control of our
supply chain, deepens our manufacturing capabilities and scientific expertise,
while also expanding and diversifying our business. The appointment of Michael
Aldridge to lead our strategic development function was another important step
as we look to broaden our capabilities and further diversify our business,
while maintaining our focus on the potential of Acthar to help many more
patients than it does today. We continue to balance our investments in the
business with a disciplined program of returning capital to shareholders, as
demonstrated by additional share repurchases and the institution of a regular
quarterly dividend."

Full Year Financial Results

Net sales for the full year of 2012 were $509.3 million, compared to $218.2
million in the full year of 2011. Cash flow from operations for the full year
of 2012 was $219.0 million, compared to $85.6 million for the full year of
2011. GAAP earnings per share for the full year of 2012 were $3.14 per diluted
common share, compared with $1.21 per diluted common share for the comparable
period of 2011. Non-GAAP earnings per share for the full year ended December
31, 2012 were $3.33 per diluted common share, excluding non-cash share-based
compensation expense, depreciation and amortization expense, and impairment of
intangibles. Non-GAAP earnings for the comparable period of 2011 were $1.27
per diluted common share.

Research and Development Programs

Questcor's continued strong financial performance has enabled the company to
increase investment in research programs to further clarify the potential
immune-modulating properties of Acthar and identify Acthar mechanisms of
action applicable to other inflammatory and auto-immune diseases with high
unmet need. Questcor currently has approximately 35 company-sponsored clinical
and pre-clinical research projects underway. Key company-sponsored clinical
programs are in process in the following disease states:

  oLupus: Enrollment is underway in a company-sponsored multi-site Phase 4
    clinical trial to evaluate the efficacy and safety of daily Acthar
    administration over a 6-month period in patients with persistently active
    lupus.
  oIdiopathic 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.
  oDiabetic 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.
  oAmyotrophic Lateral Sclerosis (ALS): Questcor is in discussions with the
    U.S. Food and Drug Administration (FDA) to commence clinical trials of
    Acthar for the treatment of amyotrophic lateral sclerosis (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. The company expects to file an Investigational
    New Drug application (IND) and initiate a proof-of-concept trial of Acthar
    in ALS in the first half of 2013.

In addition, Questcor provides grant funding to a wide range of independent
research projects, which include the evaluation of Acthar in nephrotic
syndrome due to focal segmental glomerulosclerosis (FSGS), nephrotic syndrome
due to lupus nephritis, lupus flares, intractable chronic migraine, multiple
sclerosis, prevention of infantile spasms in at-risk patients, and others. The
company is currently funding more than 30 such independent research programs,
including both preclinical and clinical studies.

Questcor continues to receive case reports and inquiries from physicians
indicating that Acthar may be able to benefit patients whose serious illnesses
are not effectively treated with other medications, but for which Questcor
does not currently have an active sales force providing information to
specialists who treat these illnesses. As it has over the last several years,
Questcor continues to follow up on these reports and inquiries in order to
ascertain whether the Company should fund research regarding the potential
utility of Acthar in treating these serious illnesses. Past reports and
inquiries have led to the company's current work in MS and rheumatology. More
recent reports and inquiries may lead Questcor to expand its internal research
and development, including clinical trials, and other activities within
current on-label or potential new indications.

Share Repurchase Program and Cash Dividend

During the fourth quarter of 2012, Questcor used $18.6 million in cash to
repurchase 747,207 shares of its common stock in open market transactions, at
an average price of $24.93 per common share. Since the beginning of 2008, the
company has repurchased a total of 22.2 million shares of its common stock for
$340.3 million through December 31, 2012, at an average price of $15.36 per
share. As of December 31, 2012, there are approximately 6.3 million shares
authorized remaining under the stock repurchase plan. Shares outstanding were
58.5 million at December 31, 2012 and 63.6 million at December 31, 2011.

The company today announced that its Board of Directors has declared a
quarterly cash dividend of$0.25per share to all shareholders of record at
the close of business onApril 22, 2013. The quarterly cash dividend was
increased from $0.20 per share, or 25% over the previous quarterly dividend.
The dividend is scheduled to be paid on or aboutApril 30, 2013. Questcor
currently intends to pay regular quarterly cash dividends for the foreseeable
future.

2012 Corporate Highlights

  oDuring 2012, approximately 7,000 patients received new prescriptions for
    Acthar.
  oDuring 2012, additional academic papers were published providing
    incremental information regarding Acthar and its potential
    immuno-modulating properties and mechanisms of action.
  oDuring 2012, Questcor initiated two multi-center clinical trials,
    continued enrollment in a third, and initiated discussions with the FDA
    for a fourth trial.
  oDuring the second quarter of 2012, the company completed the expansion of
    its Nephrology sales force to 58 from 28 representatives.
  oIn the third quarter of 2012, the company completed the expansion of its
    neurology sales force to 107 from 77 representatives.
  oIn the third quarter of 2012, Questcor initiated commercial efforts for
    Acthar in the treatment of rheumatology-related indications already
    included on the FDA-approved package insert for Acthar. Acthar is
    indicated for multiple FDA-approved rheumatology-related conditions,
    including its use as adjunctive therapy in psoriatic arthritis, rheumatoid
    arthritis, juvenile rheumatoid arthritis, and ankylosing spondylitis.
    Acthar is also approved by the FDA as acute or maintenance therapy in
    selected cases of systemic lupus erythematosus and systemic
    dermatomyositis (polymyositis).
  oIn the fourth quarter of 2012, the company initiated the expansion of its
    rheumatology sales force to 55 from 12 rheumatology representatives.
  oQuestcor also continued to demonstrate its commitment to returning capital
    to shareholders, by expanding its common share repurchase program
    authorization by an additional 5 million shares and adopting a policy to
    pay a regular quarterly dividend in September 2012. The company
    repurchased 6.8 million shares in 2012.

Following the end of the fourth quarter of 2012:

  oOn January 18, 2013, Questcor acquired BioVectra Inc. for an upfront
    payment of $50.8 million. BioVectra has been Questcor's manufacturing
    partner for the active pharmaceutical ingredient (API) in Acthar for
    nearly a decade. The acquisition further secures the manufacturing process
    trade secrets surrounding Acthar.
  oDuring the first quarter of 2013, the Medicaid rebate amount for Acthar
    was reset to the standard basic rebate.
  oOn January 28, 2013, Questcor strengthened its management team with the
    appointment of Michael Aldridge to the new position of Senior Vice
    President, Corporate Strategic Development. Mr. Aldridge's primary
    responsibilities will be the identification and development of partnership
    and acquisition opportunities to leverage Questcor's business model. Over
    time, such initiatives may include development programs or products
    complementary to Acthar and the evaluation of potential expansion into
    ex-US markets.

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 of:

  oNephrotic 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 suffer from NS due to
    idiopathic membranous nephropathy, focal segmental glomerulosclerosis
    (FSGS), IgA nephropathy, minimal change disease and lupus nephritis.
  oMultiple 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.
  oInfantile Spasms (IS): "as monotherapy for the treatment of infantile
    spasms in infants and children under 2 years of age."
  oCollagen Diseases: "during an exacerbation or as maintenance therapy in
    selected cases of: systemic lupus erythematosus, systemic dermatomyositis
    (polymyositis)."
  oRheumatic Disorders: "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."

Non-GAAP Financial Measures

The company believes it is important to share non-GAAP financial metrics with
shareholders as these metrics 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 metrics.
Non-GAAP net income should not be viewed in isolation, or as a substitute for,
or as superior to, reported GAAP net income. The reconciliation between GAAP
and Non-GAAP net income is provided with the financial tables included with
this release.

Conference Call and Webcast and Investor Communications

The company will host a conference call and slide presentation via webcast
today, February 26, 2013, at 4:30 p.m. ET/ 1:30 p.m. PT. The call can be
accessed three ways:

  oBy webcast: At Questcor's investor relations website,
    http://ir.questcor.com/.
  oBy telephone: For both "listen-only" participants and those participants
    who wish to take part in the question-and-answer portion of the call, the
    telephone dial-in number in the U.S. is (877) 354-0215. For participants
    outside the U.S., the dial-in number is (253) 237-1173.
  oBy audio replay: A replay of the conference call will be available for
    seven business days following conclusion of the live call.The dial-in
    number for U.S. participants is (855) 859-2056. For participants outside
    the U.S., the replay dial-in number is (404) 537-3406. The replay access
    code for all callers is 95427085.

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's primary product is H.P. Acthar^® Gel
(repository corticotropin injection), an injectable drug that is approved by
the FDA for the treatment of 19 indications. Of these 19 indications, Questcor
currently generates substantially all of its net sales from the following
on-label indications: the treatment of proteinuria in the nephrotic syndrome
of the idiopathic type, or NS, the treatment of acute exacerbations of
multiple sclerosis, or MS, in adults, the treatment of infantile spasms, or
IS, in infants and children under two years of age, and the treatment of
certain rheumatology related conditions, including the treatment of the rare
and closely related neuromuscular disorders dermatomyositis and polymyositis.
With respect to nephrotic syndrome, the FDA has approved Acthar 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. Questcor is
also exploring the possibility of developing markets for other on-label
indications and the possibility of pursuing FDA approval of additional
indications not currently on the Acthar label where there is high unmet
medical need. 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," "estimates," "expects," "growth," "may," "plans,"
"potential," "remain," "should," "substantial" 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:

  oOur reliance on Acthar for substantially all of our net sales and profits;
  oReductions in vials used per prescription resulting from changes in
    treatment regimens by physicians or patient compliance with physician
    recommendations;
  oOur ability to receive high reimbursement levels from third party payers;
  oThe complex nature of our manufacturing process and the potential for
    supply disruptions or other business disruptions;
  oThe lack of patent protection for Acthar; and the possible FDA approval
    and market introduction of competitive products;
  oOur ability to continue to generate revenue from sales of Acthar to treat
    on-label indications associated with NS, MS, IS or rheumatology-related
    conditions, and our ability to develop other therapeutic uses for Acthar;
  oResearch and development risks, including risks associated with Questcor's
    work in the area of NS and Lupus, our reliance on third-parties to conduct
    research and development, and the ability of research and development to
    generate successful results;
  oThe results of any pending or future litigation, investigations or claims,
    including with respect to the investigation by the United States
    Attorney's Office for the Eastern District of Pennsylvania regarding the
    company's promotional practices and litigation brought by certain
    shareholders arising from the federal securities laws, currently pending
    in the United States District Court for the Central District of
    California;
  oOur ability to comply with federal and state regulations, including
    regulations relating to pharmaceutical sales and marketing practices;
  oRegulatory 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;
  oAn increase in the proportion of our Acthar unit sales comprised of
    Medicaid-eligible patients and government entities;
  oOur 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;
  oOur ability to effectively manage our growth, including the expansion of
    our sales forces, and our reliance on key personnel;
  oOur ability to integrate the BioVectra business with our business and to
    manage, and grow, a contract manufacturing business;
  oOur ability to comply with foreign regulations related to the operation of
    BioVectra's business;
  oThe impact to our business caused by economic conditions;
  oOur ability to protect our proprietary rights;
  oThe risk of product liability lawsuits;
  oUnforeseen business interruptions and security breaches;
  oVolatility in Questcor's monthly and quarterly Acthar shipments, estimated
    channel inventory, and end-user demand, as well as volatility in our stock
    price;
  oOur ability and willingness to continue to pay our quarterly dividend or
    make future increases in our quarterly dividend; and
  oOther risks discussed in Questcor's annual report on Form 10-K for the
    year ended December 31, 2011 as filed with the Securities and Exchange
    Commission, or SEC, on February 22, 2012, 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.
Consolidated Statements of Income
(In thousands, except per share amounts)
                           Three Months Ended         Twelve Months Ended
                           December 31,               December 31,
                           2012          2011         2012        2011
Net sales                  $ 160,532    $ 75,535    $ 509,292  $ 218,169
Cost of sales (exclusive
of amortization of         9,156         4,013        28,555      12,459
purchased technology)
Gross profit               151,376       71,522       480,737     205,710
Operating expenses:
Selling and marketing      33,051        16,998       114,139     56,728
General and administrative 11,175        5,766        33,596      17,743
Research and development   12,122        5,730        34,269      16,778
Depreciation and           268           292          1,219       1,044
amortization
Impairment of goodwill and —             —            987         299
intangibles
Total operating expenses   56,616        28,786       184,210     92,592
Income from operations     94,760        42,736       296,527     113,118
Other income:
Interest and other income, 167           145          703         627
net
Total other income         167           145          703         627
Income before income taxes 94,927        42,881       297,230     113,745
Income tax expense         32,987        11,240       99,555      34,154
Net income                 $  61,940   $ 31,641    $ 197,675  $  79,591
Net income per share
applicable to common
shareholders:
Basic                      $    1.07 $   0.50  $        $   
                                                      3.28       1.27
Diluted                    $    1.03 $   0.48  $        $   
                                                      3.14       1.21
Shares used in computing
net income per share
applicable to common
shareholders:
Basic                      58,009        63,236       60,243      62,498
Diluted                    60,266        66,565       63,045      66,010
Dividends declared per     $    0.20 $     — $        $     
common shareholder                                    0.40       —
Reconciliation of Non-GAAP
Adjusted Financial
Adjusted net income        $   65,705  $  31,584   $  209,644 $   83,956
Share-based compensation   (3,590)       (1,416)      (10,502)    (5,128)
expense (1)
Depreciation and           (175)         (216)        (811)       (731)
amortization expense (2)
Impairment of goodwill and 0             -            (656)       (209)
intangibles (3)
Tax adjustments (4)        0             1,689        0           1,703
Net income - GAAP          $   61,940  $  31,641   $  197,675 $   79,591
Adjusted net income per    $         $    0.50 $       $    
share - basic              1.13                       3.48        1.34
Share-based compensation   (0.06)        (0.02)       (0.17)      (0.08)
expense (1)
Depreciation and           (0.00)        (0.00)       (0.01)      (0.01)
amortization expense (2)
Impairment of goodwill and 0.00          0.00         (0.01)      0.00
intangibles (3)
Tax adjustments (4)        0.00          0.03         0.00        0.03
Net income per share -     $         $    0.50 $       $    
basic                      1.07                       3.28        1.27
Adjusted net income per    $         $    0.47 $       $    
share - diluted            1.09                       3.33        1.27
Share-based compensation   (0.06)        (0.02)       (0.17)      (0.08)
expense (1)
Depreciation and           (0.00)        (0.00)       (0.01)      (0.01)
amortization expense (2)
Impairment of goodwill and 0.00          0.00         (0.01)      0.00
intangibles (3)
Tax adjustments (4)        0.00          0.03         0.00        0.03
Net income per share -     $         $    0.48 $       $    
diluted                    1.03                       3.14        1.21

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
   3. Impairment of purchased technology in 2012 related to the acquisition of
   Doral and impairment of goodwill related to the write-off of goodwill
   associated with an acquisition completed in 1999, written off in 2011.
   4. Tax adjustments include: (1) the valuation allowance we established in
   the fourth quarter of 2010 relating to our single sales factor
   apportionment election which was made in 2011 for California; and (2) the
   recording of a one-time tax credit in 2011 for the orphan drug designation.



Questcor Pharmaceuticals, Inc.
Consolidated Balance Sheets
(In thousands, except per share amounts)
                                                     December 31, December 31,

                                                     2012         2011
ASSETS
Current assets:
 Cash and cash equivalents                          $ 80,608    $ 88,469
 Short-term investments                             74,705       121,680
 Total cash, cash equivalents and short-term      155,313      210,149
investments
 Accounts receivable, net of allowance for doubtful
accounts of $0 at both December31, 2012 and 2011,   61,417       27,801
respectively
 Inventories, net                                   9,909        5,226
 Prepaid income taxes                               —            6,940
 Prepaid expenses and other current assets          4,900        3,391
 Deferred tax assets                                5,737        12,093
 Total current assets                             237,276      265,600
Property and equipment, net                          2,073        1,970
Purchased technology, net                            1,493        2,778
Goodwill                                             —            —
Deposits and other assets                            70           56
Deferred tax assets                                  11,519       5,404
 Total assets                                     $252,431     $275,808
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
 Accounts payable                                   $ 13,069    $  5,503
 Accrued compensation                               21,300       11,590
 Sales-related reserves                             37,376       34,119
 Income taxes payable                               7,360        —
 Other accrued liabilities                          11,294       4,509
 Total current liabilities                        90,399       55,721
Lease termination, deferred rent and other           203          261
non-current liabilities
 Total liabilities                                90,602       55,982
Shareholders' equity:
 Preferred stock, no par value, 5,334,285shares    —            —
authorized; none outstanding
 Common stock, no par value, 105,000,000shares
authorized; 58,544,206 and 63,645,781shares issued  15,938       94,976
and outstanding at December31, 2012 and 2011,
respectively
 Retained earnings                                  145,851      124,886
 Accumulated other comprehensive income (loss)      40           (36)
 Total shareholders' equity                       161,829      219,826
 Total liabilities and shareholders' equity       $252,431     $275,808



Questcor Pharmaceuticals, Inc.
Consolidated Statements of Cash Flows
(In thousands)
                                            Years Ended December31,
                                            2012        2011       2010
                                            (In thousands)
Cash Flows From Operating Activities
Net income                                  $197,675    $ 79,591   $ 35,071
Adjustments to reconcile net income to net
cash provided by operating activities:
Share-based compensation expense            15,792      7,326      3,739
Deferred income taxes                       241         (4,896)    (1,029)
Amortization of investments                 1,330       1,250      678
Depreciation and amortization               1,219       1,044      546
Impairment of goodwill and intangibles      987         299        —
Loss on disposal of property and equipment  72          11         —
Changes in operating assets and
liabilities:
Accounts receivable                         (33,616)    (16,673)   3,705
Inventories                                 (4,683)     (1,500)    (348)
Prepaid income taxes                        6,940       (3,408)    (3,532)
Income taxes payable                        7,360       —          —
Prepaid expenses and other current assets   (1,509)     (1,527)    (702)
Accounts payable                            7,566       1,634      (9,052)
Accrued compensation                        9,710       7,432      2,018
Sales-related reserves                      3,257       12,608     6,589
Other accrued liabilities                   6,780       2,526      (255)
Other non-current liabilities               (84)        (118)      (871)
Net cash provided by operating activities   219,037     85,599     36,557
Cash Flows From Investing Activities
Purchase of short-term investments          (145,384)   (162,301)  (106,647)
Proceeds from the sale and maturities of    191,105     112,636    62,560
short-term investments
Purchase of property, equipment and         (1,065)     (1,823)    (713)
leasehold improvements
Changes in deposits and other assets        (14)        9          645
Net cash provided by /(used in) investing   44,642      (51,479)   (44,155)
activities
Cash Flows From Financing Activities
Income tax benefit realized from            7,488       17,712     1,335
share-based compensation plans
Issuance of common stock, net               6,335       6,582      1,942
Dividends paid                              (23,533)    —          —
Repurchase of common stock                  (261,830)   (11,453)   —
Net cash (used in) / provided by financing  (271,540)   12,841     3,277
activities
(Decrease) / increase in cash and cash      (7,861)     46,961     (4,321)
equivalents
Cash and cash equivalents at beginning of   88,469      41,508     45,829
year
Cash and cash equivalents at end of year    $ 80,608   $ 88,469   $ 41,508
Supplemental Disclosures of Cash Flow
Information:
Cash paid for interest                      $    23 $    16 $     7
Cash paid for income taxes                  $ 77,556   $ 25,278   $ 23,185
Supplemental disclosure of non-cash
investing and financing activities:
Capital lease obligation                    $    31 $    34 $    —

SOURCE Questcor Pharmaceuticals, Inc.

Website: http://www.questcor.com
Contact: EVC Group, Gregory Gin/Patty Eisenhaur,
+1-646-445-4801/+1-951-316-0577, or Doug Sherk, +1-415-568-4887, or Janine
McCargo, +1-646-688-0425