Subject: Follow up

 

Dear Mlke It was good to you today the recent change tn Acthar 1 fully
understand your concerns and I wanted to follow up a more detall ln on why Questcor
made declslon Questcor's Objecllve ln the new Acthar model ls to ensure Acthar's
long term to the patlents who need lt To do thls, we had to make Acthar economlcally
vlable as a product on a standalone basls, tt has not been 

Because Acthar ls a spectallzed product, belng used to treat a very small raterdlsease
patlent populatlon, Acthar has never been a profitable drug has been a challenge to
Questcor, a very small cotnpany butlt around Acthar ln Acthar ts a very dtmcult complex
product to manufacture In fact manufacturlng challenges are so acute that they have ofien led to
extended perlods of product ratlonlng In recent years Questcor has lnvested actlvely ln manutacturlng
upgrades parttcularly heavy for such a small company tn order to ensure Acthar's
conttnucd productton and These resulted tn FDA approval ofnew
manutacturlng processes and productlon sltes and the vlnual ofthe product shonages seen
tn the [9905 and early part decade

Questcor has made further tn pursutng formal FDAsappmval oftntanttle spasms as an
Questcor contlnues to work FDA on approval process Further, the company has
made costly but ultlmately unsuccessful attempts to expand Acthar usage ln other such as
Sclerosls Based on experlence, lt became clear to us that tn the treatment oflnfantlle
spasms ls where the medlcal communlty has determlned that Acthar provtdes true value to patlents
ln fact, many top pcdtatnc tell us that they feel Acthar ts the "gold standard" tn 15
treatment

Due to substantlal lnveslmenls and success ln attempts to expand usage ln new areas, Questcor
has been llterally hemorrhaglng cash 7 to the tune of$ l6 ln losses slnee Jan 2006 was not
sustatnable, parttcularly for such a small company As a result, layot=rs {50% ol'all Questcor
employees) and deep budget cuts have already taken place so tar tn 2007

Afier lnedepth revtew ofseveml potentlal strategles, Questcor's Board and executlves
declded that the best way to make Acthar economlcally vtable for the long term so that patlents have a
contlnued unlnterrupted supply ofAclhar, ls to adopt an model for Acthar,
the ultrarmre nature ofthe dlsease for lt ls actually used by doctors 1t ls lmportant to
put new tnto perspecttve for drugs ranges from $50,000 to
$500000 or more per year Efiecttve August 27, 2007, Acthar ts prtced at $23269 per vtal When used
for treatlng IS, results ln an average total treatment cost ofaround $100000 In a majorlty ofcases
IS patlents are on a course oftherapy and then they are done Acthar treatment entlrely

the cost ofActhar treatment, we are sponsorlng patlent and cospay
programs for patlents who are unlnsured or We have also set up a
relmbursement "hub" (888743572284) staffed relmbursement that are focused [00% on
lnsurance plans to verlfy Acthar coverage for patlents so that product can be to
pateltns dlrectly

 hope that funher helped to answer some ofyour quesuons from today Feel free to cull Ifynu have
quesuons

By the ua think your websne looks great and I lmagme rs a very useful resource for parems 
children sun'ermg from 15

 

 

Regards ex 2
Steve Cam
Execmlve Vlce Fresldenlr Corporare Develapmenl

Quesmor Pharmaceuticals Inc