ISS Proxy Advisory Services ("ISS") has recommended to its clients that they vote at the Company's
ISS also indicated that the number of shares that the Company is requesting causes ISS's self-imposed threshold of 15% (of outstanding shares) to be exceeded. By using the current number of outstanding Questcor shares (62 million), the ISS analysis penalizes Questcor for its shareholder-friendly share repurchase program. The Company has repurchased 15 million shares since early 2008. Had ISS used 77 million shares, the calculated dilution would be much lower.
Additionally, approximately 3.7 million of the Company's outstanding stock options are both vested and deep in-the-money due to the significant increase in its stock price since 2007. In fact, ISS highlights in its report that Questcor shareholders have enjoyed a 70% annualized return over the past five years compared to less than 1% for the Russell 3000.
The Company views the ISS calculation of the dilutive impact of the 2006 Plan as too simplistic, given its lack of consideration for the factors noted above. Adjusting for the Company's repurchase of approximately 15 million common and preferred shares and for the vested, in-the-money options, the Company believes that the model utilized by ISS would calculate dilution of approximately 12%.
"We appreciate ISS pointing out the legacy re-pricing provision in our 2006 Plan as we never considered utilizing the provision and believe the deletion of the provision is in the best interest of the Company's shareholders. Accordingly, we have eliminated the option re-pricing provision which the ISS recommendation refers to," said
"We encourage our shareholders to consider this matter very carefully and form their own opinion regarding the Company's 2006 Equity Incentive Award Plan. We view the Plan as a critical element of our overall compensation structure and do not believe that our ability to incentivize our employees should be negatively impacted by our share repurchase program,"
"Turning to the business, so far in the second quarter, the daily rate for new paid Acthar prescriptions for multiple sclerosis (MS) relapses has increased significantly from the first quarter. In fact, the second quarter's daily rate of new, paid MS prescriptions is slightly higher than the very strong record daily rate seen in the month of March. We are also seeing similar trends in nephrotic syndrome (NS) prescriptions so far in the second quarter. We are continuing to plan the next expansion of our sales effort, with a focus on NS this time. We plan to accomplish this expansion without any decrease in the effort or momentum with MS," concluded
Conference Call Details
The Company will host a conference call tomorrow
To participate in the live call by telephone, please dial 888-549-7880 for domestic participants and 480-629-9678 for international participants. Participants are asked to call the above numbers 5-10 minutes prior to the starting time. The call will also be webcast live at www.questcor.com. An audio replay of the call will be available for 7 days following the call. This replay can be accessed by dialing 800-406-7325 for domestic callers and 303-590-3030 for international callers, both using passcode 4441143#. An archived webcast will also be available at www.questcor.com.
Note: Except for the historical information contained herein, this press release contains forward-looking statements that have been made pursuant to the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. These statements are only predictions. Actual events or results may differ materially. Factors that could cause or contribute to such differences include, but are not limited to, the following:
News Provided by Acquire Media