Aetna all but drops Questcor's Acthar drug; shares plummet

Easy come, easy go? Questcor Pharmaceuticals ($QCOR) got a big boost yesterday after an Oppenheimer analyst raised his price target on the stock, citing Medicaid rebate changes that could boost sales of its Acthar drug by almost $100 million next year. Today, Aetna all but dropped its coverage of Acthar--and the stock plummeted.

As Bloomberg reports, Aetna decided that Acthar was medically necessary for only one of its several indications: West syndrome, which causes infantile spasms. For other uses--including indications in multiple sclerosis and nephrotic syndrome--the gel hasn't been proven to work better than existing treatments, or hasn't proven effective at all. The stock was down more than 50% at press time.

That's quite a turnabout from yesterday, when Questcor shares leapt by 4%, on the news that Oppenheimer's Christopher Holterhoff had hiked his price target to $69 from $59. After an investor briefing by the company, Holterhoff said he figured Acthar would bring in $687 million next year, up from previous estimates of $590 million.

As the Associated Press reports, the company had said early this month that the rebate could be cut to 23.1% in 3-6 months, boosting its own share of sales. Holterhoff figured that change could help raise Acthar's sales to that $687 million level. Questcor shares had gained 15% since that disclosure--and 42% since early August.

- read the Bloomberg story
- get more from the AP

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