Questcor Pharmaceuticals Inc's first-quarter profit lagged analysts' expectations as sales of its Acthar drug fell due to Medicaid reimbursement changes but the company said sales have bounced back in the current quarter.
Questcor shares fell 12 percent to $27.00 soon after markets closed but recovered to be down 2 percent at 1800 ET.
The company said shipments of Acthar, which is approved to treat multiple disorders including infantile spasms, were 4,830 vials in the first quarter, down about 24 percent from the previous quarter.
However, Questcor said Acthar shipments totaled 2,550 vials in April, a record for a single month.
"Vial shipment activity and prescription levels in (multiple sclerosis) and rheumatology in late March and throughout April appear to indicate that positive sales momentum has returned," Questcor Chief Executive Don Bailey said in a statement.
Questcor also blamed the weak sales in the first quarter to disruption in its distribution channel and the time gap between receipt of prescription and dispatch of the drug.
Net income rose 1 percent to $39.06 million, or 65 cents per share, for the quarter ended March 31, from $38.5 million, or 58 cents per share, a year earlier.
Total revenue rose about 40 percent to $135.1 million in the quarter from a year earlier. Revenue included $8.3 million from BioVectra Inc, a contract manufacturer Questcor acquired in January.
Excluding certain items, the company earned 76 cents per share.
Analysts on average had expected earnings of 96 cents per share on revenue of $157.16 million, according to Thomson Reuters I/B/E/S.
Questcor shares closed at $30.74 on the Nasdaq on Tuesday.
About 46 percent of the company's outstanding shares were shorted as of April 4, according to Thomson Reuters data.
Investors who sell securities "short" profit from betting that the stocks would fall. Short interest is often a gauge for the level of skepticism among investors.
(Reporting By Pallavi Ail in Bangalore; Editing by Sriraj Kalluvila)