Ahead of the Bell: US probes Questcor promotions
Shares of Questcor Pharmaceuticals Inc. sank in premarket trading Monday after the drug developer said the U.S. government is investigating its promotional practices.
The Anaheim, Calif., company said in a brief statement that it is cooperating with the government, and it won't be able to provide any more information on the matter other than through required public disclosures.
Questcor shares tumbled 29 percent, or $8.71, to $21.42 before markets opened Monday. If that holds up in regular trading, its shares will have fallen more than 42 percent so far this year
The company's stock started tumbling last week, after health insurer Aetna Inc. said it would stop reimbursement for most uses of Questcor's main product, H.P. Acthar gel.
Questcor markets Acthar gel as a treatment for multiple sclerosis, neuromuscular conditions, and a kidney condition called nephrotic syndrome. Aetna said it will drop reimbursement for all uses except infantile spasms, but patients currently receiving Acthar gel will be covered so they can complete their treatment.
Questcor officials have said Aetna's policy appears to be an interim decision, and it is discussing the policy with the insurer. Aetna has said it expects to further review its policy on Acthar next month.
The drug developer also has said it does not believe Aetna's decision will materially affect its results, but analysts have said the move could prompt other health insurers to make the same coverage decision.
Questcor shares tumbled 48 percent to $26.36 in heavy trading on Sept. 19 after a research website reported Aetna's decision. The shares set a new 52-week low price of $22.26 that day before climbing to close above $26. The stock then rallied to close last week at $30.13.