Questcor Reports Third Quarter Financial Results

               Questcor Reports Third Quarter Financial Results

- Net Sales and EPS Increase Over 65% Compared to Prior Year -

- Vial Shipments up 45% Over Prior Year -

- Record MS Prescriptions; Rheumatology Largest Growth Contributor -

PR Newswire

ANAHEIM, Calif., Oct. 29, 2013

ANAHEIM, Calif., Oct. 29, 2013 /PRNewswire/ --Questcor Pharmaceuticals, Inc.
(NASDAQ: QCOR) today reported financial results for the third quarter and nine
months ended September 30, 2013.

                  Three Months Ended       Three Months Percentage Change
                 09/30/13                   Ended 09/30/12
Net Sales        $236.3 Million             $140.3 Million  68%
GAAP Diluted EPS $1.52                      $0.91           67%
Non-GAAP Diluted $1.68                      $0.97           73%
EPS



                   Nine Months Ended       Nine Months Ended Percentage Change
                   09/30/13                09/30/12
GAAP Net Sales     $556.0 Million          $348.8 Million    59%
Non-GAAP Net Sales $567.5 Million          $348.8 Million    63%
GAAP Diluted EPS   $3.32                   $2.12             57%
Non-GAAP Diluted   $3.82                   $2.25             70%
EPS



Net sales for the third quarter ended September 30, 2013 were $236.3 million,
up 68 percent from $140.3 million in the third quarter of 2012. The increase
was driven by the expanded usage of H.P. Acthar^® Gel (repository
corticotropin injection) in multiple therapeutic areas. The most significant
increase in net sales was driven by rheumatologists prescribing Acthar for
patients suffering from dermatomyositis, polymyositis, rheumatoid arthritis,
and systemic lupus erythematosus. The increase in net sales was also driven by
the continued prescribing of Acthar by nephrologists in the treatment of
nephrotic syndrome (NS) and by neurologists in the treatment of multiple
sclerosis (MS) relapses and infantile spasms (IS). BioVectra, the company's
specialty manufacturing subsidiary, acquired in January 2013, had net sales of
$9.0 million in the third quarter of 2013. GAAP earnings for the third quarter
of 2013 were $1.52 per diluted common share, up 67 percent from $0.91 per
diluted common share in the third quarter of 2012.

Questcor shipped 8,132 vials of Acthar during the third quarter of 2013, up 45
percent compared to 5,590 vials in the year ago quarter. As the Company has
previously disclosed, 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 Company believes that investors should consider the Company's
results over several quarters when analyzing the Company's performance.

"Our net sales continued to expand with rheumatology, neurology, and
nephrology exhibiting growth year-over-year," said Don M. Bailey, President
and CEO of Questcor. "This quarter's performance was primarily driven by a
continued increase in Acthar usage among both rheumatologists and
nephrologists. Additionally, there was a record number of paid prescriptions
for MS relapse during the quarter. The overall increased use of Acthar to
treat a wide variety of patients encourages us to further increase our R&D
investment and has specifically led to the initiation of two new phase II
studies this year in Amyotrophic Lateral Sclerosis  (ALS) and Acute
Respiratory Distress Syndrome (ARDS). We also continue to build the body of
evidence for Acthar in current and potential new indications through our
investment in company-sponsored studies and our support of
investigator-initiated studies. A significant focus of these efforts is on
developing a better general understanding of melanocortin biology, which could
significantly influence our long term R&D strategy for both Acthar and our
newest compound Synacthen."

"As Questcor's annualized sales approach the $1 billion mark, we believe we
have established a strong foundation for growth and remain excited about our
future prospects," continued Mr. Bailey. "Our future will be driven by four
areas: increased penetration of Acthar in current markets and expansion into
additional on-label markets, globalization of Synacthen and Acthar,
development of new indications and markets, and the appropriate deployment of
cash that we believe will be generated from these activities."

"New paid prescriptions for Acthar were strong across all of our markets,
totaling approximately 2,450 to 2,500 in the third quarter, about a 30%
increase from a year ago," commented Steve Cartt, Chief Operating Officer of
Questcor. "We continue to experience a strong early level of prescribing of
Acthar in the rheumatology-related indications dermatomyositis, polymyositis,
lupus and rheumatoid arthritis. There were 450 to 460 new paid Acthar
prescriptions for these FDA-approved rheumatology indications during the third
quarter, up about 43% from the second quarter. Notably, in only our second
full quarter of promotion to rheumatologists, rheumatology prescriptions
already account for nearly a quarter of total Acthar business."

Mr. Cartt continued, "There were also 370 to 380 new paid prescriptions for NS
in the quarter, up about 7% year-over-year. NS prescriptions currently
account for about one third of our Acthar business. Particularly encouraging
was the record level of Acthar prescriptions for the treatment of MS relapse,
despite this being one of our more mature markets. During the third quarter
there were 1,370 to 1,400 new paid prescriptions for MS relapse patients, up
about 4% year-over-year. MS relapse prescriptions currently represent between
25% and 30% of our Acthar business. New paid prescriptions for IS were also
up, reaching 225 to 230, an increase of 33% year-over-year."

"We have recently begun hiring personnel for our initial effort to educate
pulmonologists about Acthar in the treatment of respiratory manifestations of
symptomatic sarcoidosis, an orphan inflammatory disease with high unmet
medical need for which Acthar is FDA-approved. We expect to complete building
this pilot sales team of 5-10 sales reps and initiate sales calls on this new
Acthar physician audience by the end of the fourth quarter," concluded Mr.
Cartt.

The Company believes that insurance coverage for Acthar continues to remain
favorable, when Acthar is prescribed for indications for patients in need of
an additional 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 and do not include prescriptions filled through the
Company's free drug program, administered by the National Organization for
Rare Disorders.

Year-to-Date Financial Results

Net sales for the first nine months of 2013 were $556.0 million, with
BioVectra contributing $24.9 million. Net sales in the first nine months of
2012 were $348.8 million. GAAP earnings for the first nine months of 2013 were
$3.32 per diluted common share, compared to $2.12 per diluted common share for
the comparable period of 2012.

Research and Development Progress

Research and development (R&D) investment increased 114% to $17.1 million in
the three months ended September 30, 2013, as compared to $8.0 million for the
year ago period. R&D investments were $40.1 million for the first nine months
of 2013, as compared to $22.1 million for the year ago period. The increased
R&D investment reflects the Company's efforts to further clarify the potential
immune-modulating properties of Acthar and Synacthen and identify mechanisms
of action applicable to other inflammatory and auto-immune diseases with high
unmet medical need. The Company is also identifying new patient populations in
which to evaluate Acthar and Synacthen through clinical studies. Questcor is
funding research and development, both in-house and through independent
physician sponsored studies, for the following:

Label Enhancement Programs:

  oAcute Respiratory Distress Syndrome (ARDS): The Company announced on
    October 22, 2013 that it will commence a Phase 2 study to explore the
    efficacy and safety 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.
  oAmyotrophic Lateral Sclerosis (ALS): Patient recruitment continues at
    thirteen U.S. clinical sites 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.
  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.

Research Regarding Approved Indications:

  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.
  oLupus: Enrollment continues in a company-sponsored multi-site Phase 4
    company-sponsored clinical trial to evaluate the efficacy and safety of
    daily Acthar administration over a 6-month period in patients with
    persistently active lupus.

Planning activities related to the initial evaluation of a select grouping of
potential Synacthen indications are in progress. Questcor will provide
further updates on this development program in future communications.

Cash, Share Repurchase Program and Dividends

As of October 25, 2013, Questcor had cash, cash equivalents and short-term
investments of $324 million, including restricted cash of $75 million set
aside to secure certain post-closing payment obligations related to Questcor's
acquisition of Synacthen. There were no share repurchases during the third
quarter of 2013 and Questcor had 6.3 million remaining authorized shares under
the Company's existing common stock repurchase plan. Diluted shares
outstanding at September 30, 2013 were 62.1 million shares.

The Company announced on October 10, 2013 that its Board of Directors declared
a quarterly cash dividend of $0.30 per share ($1.20 per share on an annual
basis), reflecting a 5 cent or 20 percent increase over the previous quarter's
dividend, and a 50 percent increase year over year. The dividend will be paid
on or about October 30, 2013 to shareholders of record at the close of
business on October 22, 2013. Questcor currently intends to pay regular
quarterly cash dividends for the foreseeable future. 

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 have proteinuria and
    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 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.

Conference Call and Webcast Details

The Company will host a conference call and slide presentation via webcast
today, October 29, 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
    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 telephone
    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 76004546.

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. 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 approved indications: the treatment of proteinuria in the
nephrotic syndrome (NS) of the idiopathic type, the treatment of acute
exacerbations of multiple sclerosis (MS) in adults, the treatment of certain
rheumatology related conditions, and the treatment of infantile spasms (IS) in
infants and children under two years of age. With respect to NS, 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 has announced its intent to initiate a pilot
commercialization effort for Acthar for the treatment of respiratory
manifestations of symptomatic sarcoidosis. The FDA approved package insert for
Acthar includes "symptomatic sarcoidosis" under the heading "Respiratory
Diseases." 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. Questcor also has agreed to acquire certain international
rights for Synacthen® (tetracosactide) and Synacthen Depot®, and has licensed
the right to develop and seek FDA approval for these products in the United
States. 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:

  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, efforts to develop and obtain FDA
    approval of Synacthen, 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 government investigations and private securities litigation;
  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, planned international expansion, 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 and the international sales of Synacthen;
  oThe impact to our business caused by economic conditions;
  oOur ability to protect our proprietary rights;
  oThe risk of product liability lawsuits;
  oOur ability to successfully enter into, and operate in, international
    markets;
  oThe risk of unfavorable changes in currency exchange rates;
  oUnforeseen business interruptions and security breaches;
  oVolatility in Questcor's 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, 2012 as filed with the Securities and Exchange
    Commission, or SEC, on February 27, 2013, 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      Nine Months Ended
                                September30,           September30,
                                2013        2012        2013        2012
Revenue
Pharmaceutical net sales        $ 227,296   $ 140,339   $ 531,113   $ 348,760
Contract manufacturing net      9,050       —           24,935      —
sales
Total net sales                 236,346     140,339     556,048     348,760
Cost of sales (exclusive of
amortization of purchased       20,034      7,499       53,444      19,399
technology and IPR&D asset)
Gross profit                    216,312     132,840     502,604     329,361
Operating expenses:
Selling and marketing           40,710      31,763      114,072     81,087
General and administrative      15,428      8,333       41,103      22,422
Research and development        17,094      7,997       40,127      22,147
Depreciation and amortization   995         339         3,079       951
Impairment of purchased         —           987         719         987
technology
Total operating expenses        74,227      49,419      199,100     127,594
Income from operations          142,085     83,421      303,504     201,767
Interest and other (expense)    (1,976)     102         (2,298)     536
income, net
Foreign currency transaction    —           —           (488)       —
loss
Income before income taxes      140,109     83,523      300,718     202,303
Income tax expense              45,668      27,836      98,092      66,568
Net income                      $ 94,441    $ 55,687    $ 202,626   $ 135,735
Change in unrealized gains or
losses on available-for-sale
securities, net of related tax  932         13          (1,742)     90
effects and changes in foreign
currency translation
adjustments.
Comprehensive income            $ 95,373    $ 55,700    $ 200,884   $ 135,825
Net income per share:
Basic                           $ 1.60      $ 0.95      $ 3.47      $ 2.23
Diluted                         $ 1.52      $ 0.91      $ 3.32      $ 2.12
Shares used in computing net
income per share:
Basic                           58,890      58,653      58,350      60,992
Diluted                         62,084      61,417      61,119      63,914
Dividends declared per share    $ —         $ 0.20      $ 0.50      $ 0.20
of common stock



Reconciliation of Non-GAAP Adjusted
Financial Disclosure
                                          Three Months Ended Nine Months Ended
                                          September 30,      September 30,
                                          2013      2012     2013     2012
Adjusted net income                       $104,368  $59,427  $233,328 $143,943
Share-based compensation expense (1)      (5,269)   (2,855)  (13,807) (6,908)
Depreciation and amortization expense (2) (3,127)   (226)    (6,253)  (638)
Interest expense associated with          (188)     0        (572)    0
contingent consideration (3)
Interest expense associated with R&D
liability in conjunction with acquisition (1,141)   0        (1,140)  0
of Synacthen (4)
Compensation expense associated with BV   (202)     0        (534)    0
Trust (5)
Foreign currency transaction loss (6)     0         0        (329)    0
Medicaid adjustment for 2002 - 2009 (7)   0         0        (7,751)  0
BioVectra purchase price adjustment (8)   0         0        169      0
Impairment of purchased technology (9)    0         (659)    (485)    (662)
Net income – GAAP                         $94,441   $55,687  $202,626 $135,735
Adjusted net income per share - basic     $1.77     $1.01    $4.00    $2.36
Share-based compensation expense (1)      (0.09)    (0.05)   (0.24)   (0.11)
Depreciation and amortization expense (2) (0.05)    0.00     (0.11)   (0.01)
Interest expense associated with          0.00      —        (0.01)   —
contingent consideration (3)
Interest expense associated with R&D
liability in conjunction with acquisition (0.02)             (0.02)
of Synacthen (4)
Compensation expense associated with BV   0.00      —        (0.01)   —
Trust (5)
Foreign currency transaction loss (6)     —         —        (0.01)   —
Medicaid adjustment for 2002 - 2009 (7)   —         —        (0.13)   —
BioVectra purchase price adjustment (8)   —         —        0.00     —
Impairment of purchased technology (9)    —         (0.01)   (0.01)   (0.01)
Net income per share – basic              $1.60     $0.95    $3.47    $2.23
Adjusted net income per share - diluted   $1.68     $0.97    $3.82    $2.25
Share-based compensation expense (1)      (0.08)    (0.05)   (0.23)   (0.11)
Depreciation and amortization expense (2) (0.05)    0.00     (0.10)   (0.01)
Interest expense associated with          0.00      —        (0.01)   —
contingent consideration (3)
Interest expense associated with R&D
liability in conjunction with acquisition (0.02)             (0.02)
of Synacthen (4)
Compensation expense associated with BV   0.00      —        (0.01)   —
Trust (5)
Foreign currency transaction loss (6)     —         —        (0.01)   —
Medicaid adjustment for 2002 - 2009 (7)   —         —        (0.13)   —
BioVectra purchase price adjustment (8)   —         —        0.00     —
Impairment of purchased technology (9)    —         (0.01)   (0.01)   (0.01)
Net income per share – diluted            $1.52     $0.91    $3.32    $2.12
Net sales – Questcor                      $227,296  $140,339 $531,113 $348,760
Net sales - BioVectra                     9,050     0        24,935   0
Consolidated net sales                    236,346   140,339  556,048  348,760
Medicaid adjustment                       0         0        11,500   0
Adjusted consolidated net sales           $236,346  $140,339 $567,548 $348,760



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. Interest expense associated with the net present value adjustment on our
contingent consideration.
4. Interest expense associated with the net present value adjustment on the
R&D liability in conjunction with acquisition of Synacthen.
5. Compensation expense associated with the BV Trust agreement.
6. Foreign currency transaction loss.
7. Medicaid adjustment for prior period 2002 - 2009
8. BioVectra purchase price adjustment related to a labor rebate received in
the second quarter 2013
9. Impairment of purchased technology related to our acquisition of Doral.



QUESTCOR PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share information)

(unaudited)
                                                   September30,  December31,

                                                   2013           2012
ASSETS
Current assets:
Cash and cash equivalents                          $  190,845     $  80,608
Short-term investments                             15,282         74,705
Total cash, cash equivalents and short-term        206,127        155,313
investments
Accounts receivable, net of allowances for
doubtful accounts of $433 and $0 at September 30,  88,832         61,417
2013 and December 31, 2012, respectively
Inventories, net of allowances of $1,393 and $52
at September 30, 2013 and December 31, 2012,       17,049         9,909
respectively
Current portion of restricted cash                 25,000         —
Prepaid expenses and other current assets          5,127          4,900
Prepaid income taxes                               2,741          —
Deferred tax assets                                3,460          5,737
Total current assets                               348,336        237,276
Property and equipment, net                        33,331         2,073
Purchased technology, net                          —              1,493
Goodwill                                           21,249         —
Other Intangibles, net                             32,049         —
In process R&D asset, net                          194,108        —
Restricted cash, less current portion              50,000         —
Deposits and other assets                          1,033          70
Deferred tax assets                                11,519         11,519
Total assets                                       $  691,625     $  252,431
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable                                   $  22,462      $  13,069
Accrued compensation                               14,115         21,300
Sales-related reserves                             36,993         37,376
Accrued royalties                                  25,954         9,802
Current portion of contingent consideration in     4,486          —
conjunction with acquisition of BioVectra
Current portion of in process R&D liability in     25,000         —
conjunction with acquisition of Synacthen
Income taxes payable                               —              7,360
Current portion of long-term debt                  1,713          —
Other accrued liabilities                          5,544          1,492
Total current liabilities                          136,267        90,399
Long-term debt, less current portion               14,972         —
Contingent consideration in conjunction with       26,466         —
acquisition of BioVectra
In process R&D liability in conjunction with       113,354        —
acquisition of Synacthen
Non current deferred tax liability                 11,590         —
Other non current liabilities                      4,183          203
Total liabilities                                  306,832        90,602
Shareholders' equity:
Preferred stock, no par value, 5,334,285 shares    —              —
authorized; none outstanding
Common stock, no par value, 105,000,000 shares
authorized, 60,768,440 and 58,544,206 shares       67,913         15,938
issued and outstanding at September 30, 2013 and
December31, 2012, respectively
Retained earnings                                  318,582        145,851
Accumulated other comprehensive (loss) income      (1,702)        40
Total shareholders' equity                         384,793        161,829
Total liabilities and shareholders' equity         $  691,625     $  252,431



QUESTCOR PHARMACEUTICALS, INC.

CONDENSDED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)
                                                        Nine Months Ended
                                                        September30,
                                                        2013        2012
OPERATING ACTIVITIES
Net income                                              $ 202,626   $ 135,735
Adjustments to reconcile net income to net cash
provided by operating activities:
Share-based compensation expense                        20,485      10,295
Deferred income taxes                                   2,414       387
Amortization of investments                             271         1,185
Depreciation and amortization                           9,278       951
Impairment of purchased technology and goodwill         719         987
Loss on disposal of property and equipment              95          33
Imputed interest for contingent and in-process R&D      2,260       —
Changes in operating assets and liabilities, net of
business acquisition:
Accounts receivable                                     (20,947)    (34,478)
Inventories                                             4,260       (1,928)
Prepaid income taxes                                    (2,741)     5,474
Prepaid expenses and other current assets               299         (2,002)
Accounts payable                                        7,480       6,091
Accrued compensation                                    (7,185)     4,412
Accrued royalties                                       16,152      3,254
Sales-related reserves                                  (383)       4,266
Income taxes payable                                    (6,664)     —
Other accrued liabilities                               3,424       946
Other non-current liabilities                           4           (259)
Net cash flows provided by operating activities         231,847     135,349
INVESTING ACTIVITIES
Purchase of property and equipment                      (1,647)     (651)
Purchase of short-term investments                      (61,678)    (122,776)
Proceeds from maturities of short-term investments      120,807     167,524
Restricted cash associated with the acquisition of      (75,000)    —
Synacthen
Acquisition of BioVectra, net of cash acquired          (46,692)    —
Acquisition of Synacthen                                (60,000)    —
Proceeds from sale of Doral                             700         —
Deposits and other assets                               727         (14)
Net cash flows (used in) / provided by investing        (122,783)   44,083
activities
FINANCING ACTIVITIES
Repayment of funded long-term debt                      (925)       —
Repayment of other long-term debt                       (374)       —
Income tax benefit realized from share-based            15,412      6,678
compensation plans
Dividends paid                                          (29,895)    —
Issuance of common stock, net                           16,078      4,698
Repurchase of common stock                              —           (243,201)
Net cash flows provided by / (used in) financing        296         (231,825)
activities
Effect of cash on changes in exchange rates             877         —
Increase (decrease) in cash and cash equivalents        110,237     (52,393)
Cash and cash equivalents at beginning of period        80,608      88,469
Cash and cash equivalents at end of period              $ 190,845   $ 36,076
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest                                  $ 554       $ 17
Cash paid for income taxes                              $ 89,765    $ 54,024
Supplemental Disclosures of Investing and Financing
Activities:
Dividend payable                                        $ —         $ 11,691
In conjunction with the acquisition of BioVectra at
January 18, 2013:
Incremental fair value of assets acquired, net          $ 80,698
Less: fair value of contingent consideration            (30,383)
                                                        50,315
Loss on foreign exchange rate                           488
Total cash paid for acquisition of BioVectra            $ 50,803

SOURCE Questcor Pharmaceuticals, Inc.

Website: http://www.questcor.com
Contact: EVC Group, Gregory Gin/Patty Eisenhaur, 646-445-4801/951-316-0577, or
Doug Sherk, 415-652-9100, or Janine McCargo, 646-688-0425
 
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