Picking up where The Street Sweeper left off, Citron Research is out with their latest report on Questcor Pharmaceuticals (QCOR). The crux of the argument is the company has one FDA approved drug that it sells, HP Acthar Gel, but this drug has been approved numerous times before as a generic drug.
Let’s be clear: Citron is not claiming Questcor’s sole drug HP Acthar Gel is “snake oil”. It is a real drug with a bona fide FDA approval. The truth is right there in black and white in Questcor’s approval letter from the FDA. HP Acthar Gel is injectable corticotropin. It has one active ingredient: a well known, naturally occurring substance in humans called adrenocorticotropic hormone, or corticotropin, or ACTH for short.
The problem with Questcor as an investment thesis is that this same hormone ACTH has also been approved by the FDA as a generic drug numerous times in the last 60 years – by numerous manufacturers – with essentially the same label for the same conditions. Through the Freedom of Information Act, Citron has obtained the FDA’s approval history on ACTH. If you are a Questcor investor, Citron recommends you read these file, which completely negate the “barrier to entry” claims of Questcor’s CEO.
Citron’s full report after the jump.