QCOR Accelerated Dividend Highlights Acthar Growth

Questcor Pharmaceuticals (NASDAQ:QCOR) announced a per share cash dividend of $0.20 to shareholders of record on December 14, 2012. The payment is accelerated, as the dividend was initially set to be declared and distributed in 1Q 2013. The company notes that the early payment expresses confidence in QCOR’s business outlook, supporting our recent article which asserts that Acthar sales are holding up and likely are still growing. The company’s current initiative to expand its sales force by nearly 30% backs the investment thesis. QCOR management notes that the payout of the dividend on December 21st enables shareholders to benefit from the current dividend tax rate that is scheduled to expire at the end of 2012. However, we believe that this move was also driven by management’s desire to communicate the health of the business. The company’s CEO stated in the press release that, “Our business continues to grow and this dividend reflects our positive outlook and confidence in our ability to continue to generate returns for shareholders and invest in future growth through R&D.” This quote suggests that when Acthar prescription data become visible again through IMS Health and perhaps via the company releasing its own data in advance of the IMS trends, investors will get further confidence in EPS of more than $4.00 per share next year and further growth off of this impressive base. Expect QCOR shares to react positively to the news, with the shares potentially trading into the $30 range by year-end.

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