Questcor Pharmaceuticals (QCOR) - crossing the finish line in ~1 week

Questcor Pharmaceuticals (QCOR) is scheduled to hear from the FDA's decision regarding its infantile spasm drug, H.P Acthar Gel, on Sept 11, 2010 (since this falls on a Saturday, the announcement will be available most likely Friday or Monday).  An official stamp by the agency will allow Questcor to receive an orphan drug status and market and promote the drug specifically for the indication of infantile spasm, a serious form of epilepsy, or seizure disorder, occurring during infancy and childhood (~0.03 to 0.05% of live births).

Delay in June
Originally, the FDA was expected to announce the final call on H.P Acthar Gel's approval on June 11, causing the stock to rally at the time.  However, an unforeseen notification was issued to Questcor to postpone the key date to Sept 11, 2010.  News like this typically would drag the stock price down as investors retreat in panic.  Surprisingly, instead of a large scale sell off, the stock soared and gained 14% in 4 days after FDA's delay ($10.01 --> $11.44).

Cheerful note
The surge in stock price, while peculiar, may have resulted directly from the FDA's positive tone in its communication with QCOR:

The FDA extended the PDUFA date in order to review information regarding labeling and potential post-approval commitments that they solicited from Questcor.

"Labeling" and "post-approval commitments" sound to me like an 80% tilt in the direction of approval.  Furthermore, the advisory panel, which met on May 6, 2010, expressed willingness to support the passing of Questcor's drug.  The members voted 22 yes to 1 no when asked, "did Questcor provide substantial evidence of effectiveness of Acthar as a treatment for the patients with infantile spasms?" and 20 yes, 1 no, and 2 abstentions when asked, "did Questcor submit sufficient evidence of safety of Acthar at an effective dosing regimen?"

Stock trend
QCOR has seen its ups and downs in the past 3 month.  With the key PDUFA date ahead (Sept 11, 2010), the stock is poised for a run.  However, with the recent dismal outcome of drug reviews (e.g. Jazz Pharmacuticals, Vivus Inc.) and FDA's notorious unpredictable nature, nothing can be said for sure.  Nevertheless, in a recent note provided to his clients, John Newman, an Oppenheimer analyst, maintains a buy rating on QCOR with a $14 price target, expecting FDA's complete approval of Acthar Gel for the treatment of infantile spasm.  Upon approval, the drug could add $10 - 15 million to Questcor's already-impressive earnings and raise EPS by 4 to 9 cents.

Disclaimer:  Long QCOR