Questcor Drops on Mizuho Report
Shares of Questcor Pharmaceuticals (NASDAQ: QCOR) traded over seven percent lower on Friday..
One reason for the drop involves Japanese investment bank Mizuho, who assumed coverage on shares of Questcor. They issued a Neutral rating and a $28.00 target price on the stock, which is far lower than other analyst's expectations with an average of $40-45 per share.
Questcor is a biopharmaceutical company focused on treating difficult-to-treat autoimmune and inflammatory disorders. Their main product is HP Acthar Gel, a naturally-derived formulation of hormones used in many different disorders that have an inflammatory component.
The other major reason for the biopharma company's downturn is a clinical policy update from major insurer Aetna on November 29. The policy update limits the use of Acthar Gel to infantile spasms only. The policy deems Acthar not medically necessary for almost all of its intended uses. it also calls the product “experimental and investigational for all other indications because its effectiveness for these indications has not been established.”
Questcor relies on Acthar for almost all of their net sales and profits. The company also faces greater competition from other pharmaceutical companies who are trying to make synthetic versions of Acthar.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.