Why Questcor Shares Skyrocketed

Before you go, we thought you'd like these...
Before you go close icon

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of biotechnology company Questcor Pharmaceuticals soared a whopping 29% today after its quarterly results easily topped Wall Street expectations.

So what: The stock has been pressured in recent months on concerns that reimbursement issues would hurt sales of its H.P. Acthar gel, but today's blowout second quarter -- profit jumped 67% on a revenue surge of 64% -- is quickly putting those worries to rest. In fact, prescriptions for Acthar rose 50% over the year-ago period, giving analysts plenty of good vibes over the drug's growth potential going forward.

Now what: Don't expect the sales momentum to slow any time soon.

"Our commercial expansion effort continues, most recently driven by increasing usage of Acthar among rheumatologists," said President and CEO Don Bailey. "The foundation for potential additional growth over the near-, medium- and long-term continues to strengthen."

Of course, with the stock now up a whopping 300% over the past year and trading at a price-to-sales multiple over 5, Fools will need plenty of biotech expertise to know just how much of that growth is already baked into price.

The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

The article Why Questcor Shares Skyrocketed originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

People are Reading