Questcor Reports Fourth Quarter and Full Year 2013 Financial Results

     Questcor Reports Fourth Quarter and Full Year 2013 Financial Results  - Fourth Quarter Net Sales $243 Million; Increase 51% Year-over-Year -  - Fourth Quarter GAAP EPS of $1.44, Non-GAAP EPS of $1.67 up 53% -  - Full Year 2013 Net Sales $799 Million; Increase 57% Year-over-Year -  - Full Year GAAP EPS of $4.76, Non-GAAP EPS of $5.48 up 65% -  - Rheumatology Largest Growth Contributor -  - Approximately One Million Shares Repurchased in Fourth Quarter -  PR Newswire  ANAHEIM, Calif., Feb. 25, 2014  ANAHEIM, Calif., Feb. 25, 2014 /PRNewswire/ --Questcor Pharmaceuticals, Inc. (NASDAQ: QCOR) today reported financial results for the fourth quarter and full year ended December 31, 2013.                    Three Months Ended       Three Months Percentage Change                  12/31/13                   Ended 12/31/12 Net Sales        $242.9 Million             $160.5 Million  51% GAAP Diluted EPS $1.44                      $1.03           40% Non-GAAP Diluted $1.67                      $1.09           53% EPS                         Year Ended 12/31/13 Year Ended         Percentage Change                                          12/31/12 GAAP Net Sales       $798.9 Million      $509.3 Million     57% Non-GAAP Net Sales   $810.4 Million      $509.3 Million     59% GAAP Diluted EPS     $4.76               $3.14              52% Non-GAAP Diluted EPS $5.48               $3.33              65%  Net sales for the fourth quarter ended December 31, 2013 were $242.9 million, up 51 percent from $160.5 million in the fourth 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 increased prescribing of Acthar by nephrologists in the treatment of proteinuria associated with 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 which Questcor acquired in January 2013, had net sales of $12.6 million in the fourth quarter of 2013. GAAP earnings for the fourth quarter of 2013 were $1.44 per diluted common share, up 40 percent from the year ago quarter.Fourth quarter 2013 non-GAAP earnings per share were $1.67, an increase of 53 percent from the prior year period driven by non cash and one time related items as outlined in the Non-GAAP Adjusted Financial Disclosure attached to the Consolidated Statement of Income.   Questcor shipped 8,100 vials of Acthar during the fourth quarter of 2013 compared to 6,330 vials in the year ago quarter. For the full year of 2013, Questcor shipped 28,112 vials of Acthar compared to 20,741 vials in 2012. 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.  "In 2013, Acthar net sales grew in all therapeutic areas, with the biggest growth occurring in rheumatology," said Don M. Bailey, President and CEO of Questcor. "At the same time, the body of evidence related to Acthar expanded from investments in multiple company-sponsored clinical and non-clinical studies, as well as our ongoing support for investigator-initiated studies. In addition, we began diversifying and globalizing our business while still returning substantial cash to shareholders."  "As we turn to 2014, our highest priority is to continue our commercial momentum, while further building the body of scientific evidence for Acthar and actively exploring various strategic alternatives," continued Mr. Bailey. "Management is working closely with the Board's newly formed Strategic Advisory Committee to support the Company's investigation and evaluation of potential strategies to use its future potential cash flow to generate long-term growth and value for shareholders, patients and the healthcare community."  "New paid prescriptions for Acthar continued to be strong across all of our markets, and grew about 30% in the fourth quarter from the year ago period to approximately 2,450 to 2,500," commented Steve Cartt, Chief Operating Officer of Questcor. "Prescribing of Acthar in the FDA-approved rheumatology-related indications of dermatomyositis, polymyositis, lupus and rheumatoid arthritis remained strong with 540 to 550 new paid Acthar prescriptions in the fourth quarter, up about 20% from the third quarter. Notably, rheumatology prescriptions now account for nearly 30% of total Acthar business after only our third full quarter of educating rheumatologists on Acthar."  Mr. Cartt continued, "There were also 390 to 400 new paid prescriptions for NS in the quarter, up about 5% year-over-year. Net sales resulting from NS prescriptions currently account for approximately a third of our Acthar business. During the fourth quarter there were also 1,345 to 1,355 new paid prescriptions for MS relapse patients, up about 9% year-over-year. Net sales generated from MS relapse prescriptions currently represent over 25% of our Acthar business. There were also 180 to 185 new paid prescriptions for IS during the quarter, an increase of 3% year-over-year, but down significantly from the prior quarter."  "Regarding our newest commercial endeavor, in January we fielded a small pilot sales force 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. While still very early in this pilot selling effort, we have already begun to see encouraging results and look forward to providing further updates in the coming months," concluded Mr. Cartt.  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.  Full Year Financial Results  Net sales for the full year of 2013 were $798.9 million, with BioVectra contributing $37.6 million. Net sales for the full year of 2013 include the effect in the second quarter of the Company's decision to accrue, based on information received in the second quarter, an incremental Medicaid rebate liability of $11.5 million related to Questcor's 2001 entry into the Medicaid system subsequent to Questcor's acquisition of Acthar in 2001. The incremental liability covers periods from 2002 to 2009. Due to health care legislation passed in early 2010, there is no incremental liability for periods subsequent to 2009. On a non-GAAP basis, excluding this charge, net sales for 2013 were $810.4 million, up 59% from $509.3 million in the full year of 2012. GAAP earnings for the full year of 2013 were $4.76 per diluted common share, compared to $3.14 per diluted common share for the comparable period of 2012.  Research and Development Progress  Research and development (R&D) investment increased 62% to $19.6 million in the three months ended December 31, 2013, as compared to $12.1 million for the year ago period. R&D investments were $59.7 million for the full year of 2013, as compared to $34.3 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 (the product licensed from Novartis) 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:  New Indications for Label Enhancement Programs:    oAcute 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.   oAmyotrophic 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.   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.  Preclinical work related to the evaluation of a select group of potential Synacthen indications is in progress. Questcor will provide further updates on this development program in future communications.  Cash, Share Repurchase Program and Dividends  As of February 21, 2014, Questcor had cash, cash equivalents and short-term investments of $379 million, including restricted cash of $75 million set aside to secure certain post-closing payment obligations related to Questcor's acquisition of Synacthen. During the fourth quarter of 2013, Questcor used $53.1 million in cash to repurchase 960,000 shares of its common stock in open market transactions, at an average price of $55.26 per common share. As of December 31, 2013, there are approximately 5.3 million shares authorized remaining under the stock repurchase plan. Diluted shares outstanding for the three months ended December 31, 2013 were 62.3 million shares.  The Company announced on February 14, 2014 that its Board of Directors declared a quarterly cash dividend of $0.30 per share ($1.20 per share on an annual basis). The dividend will be paid on or about April 25, 2014 to shareholders of record at the close of business on April 18, 2014. Questcor currently intends to pay regular quarterly cash dividends for the foreseeable future.  2013 Corporate Highlights    oApproximately 7,400 patients with serious diseases were treated with     Acthar by approximately 3,000 physicians.   oQuestcor acquired BioVectra, providing the Company with third party     manufacturing capabilities and enabling Questcor to further secure the     manufacturing process trade secrets surrounding Acthar.   oQuestcor acquired the rights to develop Synacthen and Synacthen Depot in     the U.S. Subject to certain closing conditions, Questcor also acquired     rights to Synacthen^® and Synacthen Depot^® in certain countries outside     the U.S.   oThe Company completed hiring and training its Rheumatology Sales Force and     began the process of educating rheumatologists about the several     FDA-approved rheumatology indications on the Acthar label. Questcor also     initiated a pilot commercialization effort in pulmonology.   oQuestcor initiated company-sponsored, multi-center clinical trials in     Amyotrophic Lateral Sclerosis (ALS) and Acute Respiratory Distress     Syndrome (ARDS). Questcor also provided financial grantsto an increased     number of investigator-initiated studies, some of which have resulted in     important publications in peer-reviewed journals. The Company also began     preclinical work on Synacthen, its first non Acthar U.S. pipeline program.   oThe Board of Directors of Questcor formed two new committees. The Science     Committee is charged with providing advice and counsel on all of the     Company's scientific and R&D efforts. The Strategic Advisory Committee was     formed to help management's investigation and evaluation of strategic     alternatives, including business development opportunities, partnering,     in-licensing, acquisitions, mergers, other strategic transactions and     financial transactions.   oQuestcor also continued to demonstrate its commitment to returning capital     to shareholders, by returning over $100 million to shareholders through     dividend payouts, which were increased twice during 2013, and through     share repurchases.  Following the end of the fourth quarter of 2013:    oOn February 5, 2014, Questcor strengthened its management team with the     appointment of Rajesh (Raj) Asarpota as the Company's new Chief Financial     Officer, effective February 17, 2014. Michael H. Mulroy, the Company's     prior CFO, was appointed Executive Vice President, Strategic Affairs and     General Counsel, to spend increased time on the Company's initiative to     investigate and evaluate potential strategic transactions to enhance     shareholder value.  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.   oRheumatology 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."   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."  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, February 25, 2014, 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,   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 55826448.  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   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 additional competitive products;   oOur 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;   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, our ability to conduct our own clinical trial research     and development projects, 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 successfully identify, acquire or integrate acquisition     targets or other business combinations;   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 trade secrets and other 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 or    QUESTCOR PHARMACEUTICALS, INC  CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME  (In thousands, except net income per share data)  (unaudited)                                                                                    Three Months Ended        Twelve Months Ended                              December 31,              December 31,                             2013         2012         2013         2012 Revenue Pharmaceutical net sales    $230,234     $160,532     $761,347     $509,292 Contract manufacturing net  12,647       —            37,582       — sales Net sales                   242,881      160,532      798,929      509,292  Cost of sales (exclusive of amortization  20,921       9,156        74,365       28,555 of purchased technology and IPR&D asset) Gross profit                221,960      151,376      724,564      480,737 Operating expenses:  Selling and   38,784       33,051       152,856      114,139 marketing  General and   15,305       11,175       56,408       33,596 administrative  Research and  19,603       12,122       59,730       34,269 development  Depreciation  976          268          4,055        1,219 and amortization  Change in fair value of contingent    10,958       —            10,958       — consideration  Impairment of —            —            719          987 goodwill and intangibles Total operating expenses    85,626       56,616       284,726      184,210 Income from operations      136,334      94,760       439,838      296,527 Interest and other income   2,488        167          (298)        703 (expense), net Income before income taxes  138,822      94,927       439,540      297,230 Income tax expense          48,839       32,987       146,931      99,555 Net income                  $ 89,983     $ 61,940     $292,609     $197,675 Net income per share: Basic                       $   1.51  $   1.07  $   4.99  $   3.28 Diluted                     $   1.44  $   1.03  $   4.76  $   3.14 Shares used in computing net income per share: Basic                       59,406       58,009       58,616       60,243 Diluted                     62,280       60,266       61,447       63,045 Reconciliation of Non-GAAP Adjusted Financial Disclosure Adjusted net income         $103,697     $65,705      $336,514     $209,644 Share-based compensation    (5,358)      (3,590)      (19,149)     (10,502) expense (1) Depreciation and            (3,171)      (175)        (9,439)      (811) amortization expense (2) Other non-cash expense (income) related to         (4,076)      —            (4,912)      — acquisition of BioVectra (3) Other non-cash expense (income) related to         (1,109)      —            (2,267)      — acquisition of Synacthen (4) Change in accounting        —            —            (7,659)      — estimate (5) Impairment of goodwill and  —            —            (479)        (656) intangibles (6) Net income – GAAP           $89,983      $61,940      $292,609     $197,675 Adjusted net income per     $   1.75  $   1.13  $   5.74  $   3.48 share – basic Share-based compensation    (0.09)       (0.06)       (0.33)       (0.17) expense (1) Depreciation and            (0.05)       (0.00)       (0.16)       (0.01) amortization expense (2) Other non-cash expense (income) related to         (0.07)       —            (0.08)       — acquisition of BioVectra (3) Other non-cash expense (income) related to         (0.02)       —            (0.04)       — acquisition of Synacthen (4) Change in accounting        —            —            (0.13)       — estimate (5) Impairment of goodwill and  —            —            (0.01)       (0.01) intangibles (6) Net income per share –      $   1.51  $   1.07  $   4.99  $   3.28 basic Adjusted net income per     $   1.67  $   1.09  $   5.48  $   3.33 share – diluted Share-based compensation    (0.09)       (0.06)       (0.31)       (0.17) expense (1) Depreciation and            (0.05)       (0.00)       (0.15)       (0.01) amortization expense (2) Other non-cash expense (income) related to         (0.07)       —            (0.08)       — acquisition of BioVectra (3) Other non-cash expense (income) related to         (0.02)       —            (0.04)       — acquisition of Synacthen (4) Change in accounting        —            —            (0.12)       — estimate (5) Impairment of goodwill and  —            —            (0.01)       (0.01) intangibles (6) Net income per share –      $   1.44  $   1.03  $   4.76  $   3.14 diluted Pharmaceuticals net sales   $230,234     $160,532     $761,347     $509,292 Contract manufacturing net  12,647       —            37,582       — sales Consolidated net sales      242,881      160,532      798,929      509,292 Medicaid adjustment         —            —            11,500       — Adjusted consolidated net   $242,881     $160,532     $810,429     $509,292 sales    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 on our contingent consideration. 4. Expense associated with the net present value adjustment on the R&D liability in conjunction with acquisition of Synacthen. 5. Medicaid adjustment for prior period 2002 – 2009. 6. Impairment of purchased technology related to our acquisition of Doral.    QUESTCOR PHARMACEUTICALS, INC.  CONSOLIDATED BALANCE SHEETS  (In thousands, except share information)  (unaudited)                                                         December31,                                                         2013        2012 ASSETS Current assets: Cash and cash equivalents                               $ 175,840   $ 80,608 Short-term investments                                  69,166      74,705 Total cash, cash equivalents and short-term             245,006     155,313 investments Accounts receivable, net of allowances for doubtful accounts of $475 and $0 at December 31, 2013 and        87,069      61,417 December 31, 2012, respectively Inventories, net of allowances of $1,329 and $52 at     16,368      9,909 December 31, 2013 and December 31, 2012, respectively Restricted cash - current portion                       25,000      — Prepaid expenses and other current assets               7,124       4,900 Deferred tax assets                                     16,209      5,737 Total current assets                                    396,776     237,276 Property and equipment, net                             31,733      2,073 Purchased technology, net                               —           1,493 Goodwill                                                20,464      — In process R&D asset                                    191,451     — Intangibles and other non current assets                30,131      — Restricted cash                                         50,000      — Deposits and other assets                               389         70 Deferred tax assets                                     15,410      11,519 Total assets                                            $ 736,354   $ 252,431 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable                                        $ 14,302    $ 13,069 Accrued compensation                                    16,489      21,300 Sales-related reserves                                  35,370      37,376 Accrued royalties                                       35,163      9,802 Dividend payable                                        18,093      — Current portion of contingent consideration             4,238       — Current portion of in process R&D liability             25,000      — Income taxes payable                                    3,693       7,360 Current portion of long-term debt                       1,665       — Other accrued liabilities                               7,159       1,492 Total current liabilities                               161,172     90,399 Long-term debt, less current portion                    13,998      — Contingent consideration                                33,224      — In process R&D liability                                115,066     — Non current deferred tax liability                      10,569      — Other non current liabilities                           2,961       203 Total liabilities                                       336,990     90,602 Commitments and contingencies Shareholders' equity: Preferred stock, no par value, 5,334,285 shares         —           — authorized; none outstanding Common stock, no par value, 105,000,000 shares authorized, 60,137,758 and 58,544,206 shares issued     30,386      15,938 and outstanding at December 31, 2013 and December31, 2012, respectively Retained earnings                                       372,231     145,851 Accumulated other comprehensive income (loss)           (3,253)     40 Total shareholders' equity                              399,364     161,829 Total liabilities and shareholders' equity              $ 736,354   $ 252,431      QUESTCOR PHARMACEUTICALS, INC.  CONSOLIDATED STATEMENTS OF CASH FLOWS  (In thousands)  (unaudited)                                             Years Ended December31,                                             2013        2012        2011 Cash Flows From Operating Activities Net income                                  $ 292,609   $ 197,675   $  79,591 Adjustments to reconcile net income to net cash provided by operating activities: Share-based compensation expense            28,753      15,792      7,326 Deferred income taxes                       (14,849)    241         (4,896) Amortization of investments                 412         1,330       1,250 Depreciation and amortization               14,172      1,219       1,044 Impairment of goodwill and intangibles      719         987         299 Loss on disposal of property and equipment  95          72          11 Changes in fair value of contingent         6,429       —           — consideration Imputed interest for contingent             4,529       —           — consideration and in-process R&D  Other compensation expense           1,892 Changes in operating assets and liabilities: Accounts receivable                         (19,155)    (33,616)    (16,673) Inventories                                 4,577       (4,683)     (1,500) Prepaid income taxes                        —           6,940       (3,408) Prepaid expenses and other current assets   (1,335)     (1,509)     (1,527) Accounts payable                            (589)       7,566       1,634 Accrued compensation                        (4,811)     9,710       7,432 Accrued royalties                           25,361      5,463       3,030 Sales-related reserves                      (2,006)     3,257       12,608 Income taxes payable                        (3,667)     7,360       — Other accrued liabilities                   3,307       1,317       (504) Other non-current liabilities               1,335       (84)        (118) Net cash provided by operating activities   337,778     219,037     85,599 Cash Flows From Investing Activities Purchase of short-term investments          (120,645)   (145,384)   (162,301) Proceeds from the sale and maturities of    125,737     191,105     112,636 short-term investments Purchase of property, equipment and         (3,536)     (1,065)     (1,823) leasehold improvements Restricted cash associated with the         (75,000)    —           — acquisition of Synacthen Acquisition of BioVectra, net of cash       (46,692)    —           — acquired Acquisition of Synacthen                    (60,000)    —           — Proceeds from sale of Doral                 700         —           — Changes in deposits and other assets        2,119       (14)        9 Net cash (used in) / provided by investing  (177,317)   44,642      (51,479) activities Cash Flows From Financing Activities Repayment of funded long-term debt          (1,219)     —           — Repayment of other long-term debt           (491)       —           — Income tax benefit realized from            22,809      7,488       17,712 share-based compensation plans Issuance of common stock, net               15,940      6,335       6,582 Dividends paid                              (48,136)    (23,533)    — Repurchase of common stock                  (53,054)    (261,830)   (11,453) Net cash (used in) / provided by financing  (64,151)    (271,540)   12,841 activities Impact of exchange rate on cash flows       (1,078)     —           — Increase (decrease) in cash and cash        95,232      (7,861)     46,961 equivalents Cash and cash equivalents at beginning of   80,608      88,469      41,508 year Cash and cash equivalents at end of year    $ 175,840   $ 80,608    $  88,469 Supplemental disclosures of Cash Flow Information: Cash paid for interest                      $ 704       $ 23        $  16 Cash paid for income taxes                  $ 141,515   $ 77,556    $  25,278 Supplemental disclosures of Investing and Financing Activities: Dividend payable                            $ 18,093    $ 11,691    $  — Supplemental disclosure of non-cash investing and financing activities: Capital lease obligation                    $ —         $ 31        $  34 In conjunction with the acquisition of BioVectra at January 18, 2013: Incremental fair value of assets acquired,  $ 80,698 net Less: fair value of contingent              (30,383) consideration                                             50,315 Loss on foreign exchange rate               488 Total cash paid for acquisition of          $ 50,803 BioVectra  SOURCE Questcor Pharmaceuticals, Inc.  Website: Contact: Questcor Investor and Media Relations, 714-497-4899  
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