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 spasms.
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.
Noted short-seller Citron 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 effective 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 Oct. 13 .
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-related disorders.
Questcor originally sold the 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. Treatments 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 anna.prior@dowjones.com
