August 20th, 2012
Questcor Pharmaceuticals, Inc. (QCOR)
Prev close $50.52
(as of 8:30 est)
not panic. Any move we do will lock in a loss. I am going to HOLD
because the fundamentals are still strong and Aetna only represents 5% of the companies sales.
What happened you ask?
He is a short explaination
And I will re
print a more detailed article below.
Rule#1 Don’t lose Money.
The Rowboat System has been through worse than this, and we have recovered eventually; almost
There are only 3 ways we can react.
Buy back the put @ over $9.00 locking in a $830
. loss per contract.
Short the stock @ $27.00, locking in a $800 loss per contract.
Let it get put to us, and sell covered calls on it.
Most recently FMCN dropped from $20.00 To under $10.00 per share and we will probably be called
away at over $27.0
The Old timers have seen this happen before, so this is for the new subscribers, who might be a little
This stock should be trading in the $40
50 dollar range, so just be patient. The fundamentals are
strong. Below is a reprint of a more d
DJ Questcor Shares Plunge on Worries About Aetna Coverage of Acthar
By Anna Prior
Questcor Pharmaceuticals Inc. (QCOR) shares plunged Wednesday after insurer Aetna Inc. (AET)
limited reimbursement of the pharmaceutical company’
s only drug, Acthar, for treatment of infantile
Shares recently dropped 40% to $30.05 on heavy volume and earlier hit a 52
week low of $22.26 as
Aetna called the drug medically unnecessary to treat certain other conditions.
ron Research highlighted a policy bulletin on Aetna’s website from Friday that
called Acthar medically necessary for West syndrome, a relatively rare neurological disorder that
causes infantile spasms, but described its use for several other conditions as
medically unnecessary, or
investigational and experimental.
Representatives from Questcor weren’t immediately available for comment.
An Aetna spokeswoman told Dow Jones the decision was based on the lack of clinical evidence that
the drug is more effecti
ve than steroids, adding its position is based on an analysis of the available data
and is supported by public statements from the chief medical officer of the National Multiple Sclerosis
Society. It will review the policy based on any new clinical data on
In 2010, the U.S. Food and Drug Administration updated its approval of Acthar to cover 19 different
indications, narrowing the company’s immediate focus for growth to patients suffering from kidney
Questcor originally sold th
e drug to address infantile spasms, but now markets the compound for
multiple sclerosis flare
ups and is funding an exploratory study for patients whose kidney problems are
caused by diabetes, opening the company up to a potentially massive market. Treatme
nts for kidney
related disorders seem to represent the next frontier for the drug.
Potential future uses include treatment for proteinuria among diabetics, lupus and rheumatic diseases.
Write to Anna Prior at email@example.com
Subscribe to WSJ: htt
Until next time.
The Options Oracle.
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August 20th, 2012