##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 (MARK ONE)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
 FOR THE TRANSITION PERIOD FROM TO
 COMMISSION FILE NUMBER: 001-14758
 QUESTCOR PHARMACEUTICALS, INC.
 (Exact name of Registrant as specified in its charter)
 CALIFORNIA
    
    33-0476164(State or other jurisdiction
    
    (I.R.S. Employerof incorporation or organization)
    
    Identification No.)
 3260 Whipple Road
Union City, CA 94587-1217
(Address of Principal Executive Offices)
 REGISTRANTS TELEPHONE NUMBER, INCLUDING AREA CODE: (510) 400-0700
 þ o
  o o þ
 o þ




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##### 



QUESTCOR PHARMACEUTICALS, INC.
 FORM 10-Q
 TABLE OF CONTENTS
 PART I. FINANCIAL INFORMATION
    
    3Item 1 Financial Statements and Notes (Unaudited)
    
    3Consolidated Balance Sheets  June 30, 2006 and December 31, 2005
    
    3Consolidated Statements of Operations  for the three months and six months ended June
30, 2006 and 2005
    
    4Consolidated Statements of Cash Flows  for the six months ended June 30, 2006 and 2005
    
    5Notes to Consolidated Financial Statements
    
    6Item 2 Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    13Item 3 Quantitative and Qualitative Disclosures about Market Risk
    
    23Item 4 Controls and Procedures
    
    23PART II. OTHER INFORMATION
    
    23Item 1 Legal Proceedings
    
    23Item 1A Risk Factors
    
    23Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
    
    23Item 3 Defaults Upon Senior Securities
    
    24Item 4 Submission of Matters to a Vote of Security Holders
    
    24Item 5 Other Information
    
    24Item 6 Exhibits
    
    25Signatures
    
    26EXHIBIT 31EXHIBIT 32
  2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 QUESTCOR PHARMACEUTICALS, INC.
 
 CONSOLIDATED BALANCE SHEETS
 (IN THOUSANDS, EXCEPT SHARE AMOUNTS)
 June 30,
    
    
    December 31,2006
    
    
    2005(Unaudited)
    
    
    (Note 1)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    5,717
    
    
    $
    20,438Short-term investments
    
    
    5,641
    
    
    
    6,139Accounts receivable, net of allowance for doubtful accounts of $57 and $84 at
June 30, 2006 and December 31, 2005, respectively
    
    
    1,790
    
    
    
    725Inventories, net
    
    
    1,898
    
    
    
    1,577Prepaid expenses and other current assets
    
    
    512
    
    
    
    710Total current assets
    
    
    15,558
    
    
    
    29,589Property and equipment, net
    
    
    621
    
    
    
    655Purchased technology, net
    
    
    2,557
    
    
    
    Goodwill
    
    
    299
    
    
    
    299Deposits and other assets
    
    
    712
    
    
    
    805Total assets
    
    $
    19,747
    
    
    $
    31,348LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    1,624
    
    
    $
    1,505Accrued compensation
    
    
    724
    
    
    
    709Sales-related reserves
    
    
    2,841
    
    
    
    2,581Other accrued liabilities
    
    
    539
    
    
    
    632Income taxes payable
    
    
    
    
    
    
    200Preferred stock, 7,125 Series B shares at redemption amount at December 31, 2005
    
    
    
    
    
    
    7,841Total current liabilities
    
    
    5,728
    
    
    
    13,468Lease termination and deferred rent liability
    
    
    1,857
    
    
    
    1,350Other non-current liabilities
    
    
    23
    
    
    
    27Preferred stock, no par value, 7,500,000 shares authorized; 2,155,715 Series A
shares issued and outstanding at June 30, 2006 and December 31, 2005 (aggregate
liquidation preference of $10,000 at June 30, 2006 and December 31, 2005)
    
    
    5,081
    
    
    
    5,081Shareholders equity:Common stock, no par value, 105,000,000 shares authorized; 56,829,974 and
54,461,291 shares issued and outstanding at June 30, 2006 and December 31,
2005, respectively
    
    
    91,460
    
    
    
    90,576Deferred compensation
    
    
    
    
    
    
    (5
    )Accumulated deficit
    
    
    (84,399
    )
    
    
    (79,147
    )Accumulated other comprehensive loss
    
    
    (3
    )
    
    
    (2
    )Total shareholders equity
    
    
    7,058
    
    
    
    11,422Total liabilities and shareholders equity
    
    $
    19,747
    
    
    $
    31,348
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QUESTCOR PHARMACEUTICALS, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 (UNAUDITED)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenues:Net product sales
    
    $
    3,329
    
    
    $
    4,290
    
    
    $
    5,339
    
    
    $
    8,788Operating costs and expenses:Cost of product sales (exclusive of amortization of purchased
technology)
    
    
    652
    
    
    
    1,027
    
    
    
    1,278
    
    
    
    1,775Selling, general and administrative
    
    
    4,241
    
    
    
    2,224
    
    
    
    8,411
    
    
    
    4,842Research and development
    
    
    708
    
    
    
    562
    
    
    
    1,088
    
    
    
    1,061Depreciation and amortization
    
    
    78
    
    
    
    323
    
    
    
    124
    
    
    
    634Total operating costs and expenses
    
    
    5,679
    
    
    
    4,136
    
    
    
    10,901
    
    
    
    8,312Income (loss) from operations
    
    
    (2,350
    )
    
    
    154
    
    
    
    (5,562
    )
    
    
    476Other income (expense):Non-cash amortization of deemed discount on convertible debentures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (108
    )Interest income
    
    
    151
    
    
    
    23
    
    
    
    332
    
    
    
    58Interest expense
    
    
    
    
    
    
    (70
    )
    
    
    
    
    
    
    (209
    )Other income, net
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    1Rental income (expense), net
    
    
    (16
    )
    
    
    71
    
    
    
    (22
    )
    
    
    114Total other income (expense)
    
    
    135
    
    
    
    25
    
    
    
    310
    
    
    
    (144
    )Net income (loss)
    
    
    (2,215
    )
    
    
    179
    
    
    
    (5,252
    )
    
    
    332Non-cash deemed dividend related to beneficial conversion feature of
Series B preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    84Dividends on Series B preferred stock
    
    
    
    
    
    
    168
    
    
    
    
    
    
    
    336Net income (loss) applicable to common shareholders
    
    $
    (2,215
    )
    
    $
    11
    
    
    $
    (5,252
    )
    
    $
    (88
    )Net income (loss) per share applicable to common shareholders 
basic and diluted
    
    $
    (0.04
    )
    
    $
    0.00
    
    
    $
    (0.10
    )
    
    $
    0.00Shares used in computing net income (loss) per share applicable to
common shareholders  basic and diluted
    
    
    56,067
    
    
    
    52,660
    
    
    
    55,319
    
    
    
    51,942
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QUESTCOR PHARMACEUTICALS, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (IN THOUSANDS)
 (UNAUDITED)
 Six Months EndedJune 30,2006
    
    
    2005OPERATING ACTIVITIESNet income (loss)
    
    $
    (5,252
    )
    
    $
    332Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:Share-based compensation expense
    
    
    431
    
    
    
    4Amortization of deemed discount on convertible debentures
    
    
    
    
    
    
    108Depreciation and amortization
    
    
    124
    
    
    
    634Changes in operating assets and liabilities:Accounts receivable
    
    
    (1,065
    )
    
    
    (212
    )Inventories
    
    
    (279
    )
    
    
    (131
    )Prepaid expenses and other current assets
    
    
    198
    
    
    
    268Accounts payable
    
    
    119
    
    
    
    (65
    )Income taxes payable
    
    
    (200
    )
    
    
    Accrued compensation
    
    
    15
    
    
    
    (247
    )Sales-related reserves
    
    
    260
    
    
    
    906Other accrued liabilities
    
    
    (93
    )
    
    
    16Other non-current liabilities
    
    
    507
    
    
    
    (2
    )Net cash flows provided by (used in) operating activities
    
    
    (5,235
    )
    
    
    1,611INVESTING ACTIVITIESPurchase of property and equipment
    
    
    (61
    )
    
    
    (14
    )Purchase of short-term investments
    
    
    (5,643
    )
    
    
    Maturities of short-term investments
    
    
    6,140
    
    
    
    Acquisition of purchased technology
    
    
    (2,628
    )
    
    
    (2,000
    )Proceeds from sale of equipment
    
    
    
    
    
    
    1Decrease in other assets
    
    
    93
    
    
    
    83Net cash flows used in investing activities
    
    
    (2,099
    )
    
    
    (1,930
    )FINANCING ACTIVITIESIssuance of common stock, net
    
    
    458
    
    
    
    87Redemption of Series B preferred stock
    
    
    (7,841
    )
    
    
    Short-term borrowings
    
    
    
    
    
    
    191Repayment of short-term and long-term debt and capital lease obligation
    
    
    (4
    )
    
    
    (259
    )Redemption of convertible debentures
    
    
    
    
    
    
    (4,000
    )Net cash flows used in financing activities
    
    
    (7,387
    )
    
    
    (3,981
    )Decrease in cash and cash equivalents
    
    
    (14,721
    )
    
    
    (4,300
    )Cash and cash equivalents at beginning of period
    
    
    20,438
    
    
    
    8,729Cash and cash equivalents at end of period
    
    $
    5,717
    
    
    $
    4,429NON-CASH INVESTING AND FINANCING ACTIVITIES:Deemed dividend related to beneficial conversion feature of Series B preferred stock
    
    $
    
    
    
    $
    84Common stock issued in lieu of quarterly cash dividends on Series B preferred stock
    
    $
    
    
    
    $
    672
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QUESTCOR PHARMACEUTICALS, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 1. BASIS OF PRESENTATION
 ® ®
 ® ® ®
 ®
 2. SHARE-BASED COMPENSATION
  Share-Based Payment
 6




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Accounting for Stock-Based Compensation Accounting for Stock Issued to
Employees, Accounting for Stock-Based Compensation-Transition and Disclosure .
  Three Months
    
    
    Six MonthsEnded
    
    
    EndedJune 30, 2006
    
    
    June 30, 2006Cost of product sales
    
    $
    7
    
    
    $
    10Selling, general and administrative
    
    
    207
    
    
    
    328Research and development
    
    
    6
    
    
    
    10Total
    
    $
    220
    
    
    $
    348
   Three Months
    
    
    Six MonthsEnded
    
    
    EndedJune 30, 2005
    
    
    June 30, 2005Net income (loss) applicable to common shareholders, as reported
    
    $
    11
    
    
    $
    (88
    )Add: Share-based employee compensation expense included in reported net income
(loss) applicable to common shareholders
    
    
    1
    
    
    
    2Deduct: Share-based employee compensation expense determined under SFAS No. 123
    
    
    (107
    )
    
    
    (228
    )Net loss applicable to common shareholders, pro forma
    
    $
    (95
    )
    
    $
    (314
    )Basic and diluted net income (loss) per share applicable to common shareholders:As reported
    
    $
    0.00
    
    
    $
    0.00Pro forma
    
    $
    0.00
    
    
    $
    (0.01
    )
 7




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Equity Incentive Award and Stock Option Plans
    Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2006
    
    2005
    
    2006
    
    2005Expected volatility
    
    
    94
    %
    
    
    66
    %
    
    
    98
    %
    
    
    68
    %Expected term (in years)
    
    
    6.25
    
    
    
    4.0
    
    
    
    6.25
    
    
    
    4.0Risk-free rate
    
    
    5.1
    %
    
    
    3.8
    %
    
    
    4.8
    %
    
    
    4.1
    %Expected dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
  Weighted-AverageWeighted-
    
    RemainingAverage
    
    Contractual
    
    AggregateStock
    
    Exercise
    
    Term
    
    Intrinsic ValueOptions
    
    Price
    
    (in years)
    
    (in thousands)Outstanding at December 31, 2005
    
    
    6,402,074
    
    
    $
    0.76
    
    
    
    7.84Granted
    
    
    1,673,750
    
    
    
    1.09Exercised
    
    
    (317,451
    )
    
    
    0.96Forfeited or expired
    
    
    (581,558
    )
    
    
    1.47Outstanding at June 30, 2006
    
    
    7,176,815
    
    
    $
    0.77
    
    
    
    8.15
    
    
    $
    6,700Vested and exercisable at June 30, 2006
    
    
    2,593,853
    
    
    $
    0.84
    
    
    
    6.87
    
    
    $
    2,325
  8




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##### Table of Contents



Weighted-AverageRestricted
    
    
    Grant Date FairStock
    
    
    ValueNonvested shares at December 31, 2005
    
    
    
    
    
    $
    Granted
    
    
    127,811
    
    
    
    1.69Vested
    
    
    
    
    
    
    Forfeited or expired
    
    
    
    
    
    
    Nonvested shares at June 30, 2006
    
    
    127,811
    
    
    $
    1.69
  Employee Stock Purchase Plan
   Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2006
    
    2005
    
    2006
    
    2005Expected volatility
    
    
    94
    %
    
    
    64
    %
    
    
    95
    %
    
    
    64
    %Expected term (in years)
    
    
    0.25
    
    
    
    0.25
    
    
    
    0.25
    
    
    
    0.25Risk-free rate
    
    
    5.1
    %
    
    
    3.6
    %
    
    
    4.9
    %
    
    
    3.7
    %Expected dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
  9




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##### Table of Contents



3. REVENUE RECOGNITION
    4. CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
  5. INVENTORIES
  June 30,
    
    
    December 31,2006
    
    
    2005Raw materials
    
    $
    1,245
    
    
    $
    1,335Work in process
    
    
    292
    
    
    
    Finished goods
    
    
    465
    
    
    
    342Less allowance for excess and obsolete inventories
    
    
    (104
    )
    
    
    (100
    )$
    1,898
    
    
    $
    1,577
 10




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##### Table of Contents



6. PURCHASED TECHNOLOGY AND GOODWILL
   7. COMMITMENTS, INDEMNIFICATIONS AND CONTINGENCIES
   8. NET INCOME (LOSS) PER SHARE APPLICABLE TO COMMON SHAREHOLDERS
  9. WARRANT TRANSACTIONS
  10. SERIES B CONVERTIBLE PREFERRED STOCK
  11




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##### Table of Contents



11. RELATED PARTY TRANSACTIONS
  12. COMPREHENSIVE INCOME (LOSS)
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005($000s)
    
    
    ($000s)Net income (loss)
    
    $
    (2,215
    )
    
    $
    11
    
    
    $
    (5,252
    )
    
    $
    (88
    )Change in unrealized losses on available-for-sale securities
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )
    
    
    Comprehensive income (loss)
    
    $
    (2,216
    )
    
    $
    11
    
    
    $
    (5,253
    )
    
    $
    (88
    )
 13. ACQUISITION OF DORAL
  12




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14. RECENTLY ISSUED ACCOUNTING STANDARD
 Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109 Accounting for Income
Taxes
 
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Overview
 
   13




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Critical Accounting Policies
  Product Returns, Rebates and Sales Reserves
     14




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Inventories
  Intangible Assets
 Accounting for the
Impairment or Disposal of Long-Lived Assets Goodwill and Other Intangible
Assets
 Share-Based Compensation Expense
   15




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Results of Operations
 Three months ended June 30, 2006 compared to the three months ended June 30, 2005:
 Total Revenues
 Three Months EndedJune 30,
    
    
    
    
    
    %2006
    
    2005
    
    (Decrease)
    
    Change(in $000s)Net product sales
    
    $
    3,329
    
    
    $
    4,290
    
    
    $
    (961
    )
    
    
    (22
    )%
    Cost of Product Sales
 Three Months EndedJune 30,
    
    
    
    
    
    %2006
    
    2005
    
    (Decrease)
    
    Change(in $000s)Cost of product sales
    
    $
    652
    
    
    $
    1,027
    
    
    $
    (375
    )
    
    
    (37
    )%
  16




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##### Table of Contents



Selling, General and Administrative
 Three Months EndedJune 30,
    
    
    
    
    
    %2006
    
    2005
    
    Increase
    
    Change(in $000s)Selling, general and administrative expense
    
    $
    4,241
    
    
    $
    2,224
    
    
    $
    2,017
    
    
    
    91
    %
    Research and Development
 Three Months EndedJune 30,
    
    
    
    
    
    %2006
    
    2005
    
    Increase
    
    Change(in $000s)Research and development
    
    $
    708
    
    
    $
    562
    
    
    $
    146
    
    
    
    26
    %
  17




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##### Table of Contents



Depreciation and Amortization
 Three Months EndedJune 30,
    
    
    
    
    
    %2006
    
    2005
    
    (Decrease)
    
    Change(in $000s)Depreciation and amortization
    
    $
    78
    
    
    $
    323
    
    
    $
    (245
    )
    
    
    (76
    )%
   Other Income and Expense Items
 Three Months EndedJune 30,
    
    Increase/2006
    
    2005
    
    (Decrease)(in $000s)Interest income
    
    $
    151
    
    
    $
    23
    
    
    $
    128Interest expense
    
    
    
    
    
    
    (70
    )
    
    
    (70
    )Other income, net
    
    
    
    
    
    
    1
    
    
    
    (1
    )Rental income (expense), net
    
    
    (16
    )
    
    
    71
    
    
    
    (87
    )
   Series B Preferred Stock Dividends
  18




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Six months ended June 30, 2006 compared to the six months ended June 30, 2005:
 Total Revenues
 Six Months EndedJune 30,
    
    
    
    
    
    %2006
    
    2005
    
    (Decrease)
    
    Change(in $000s)Net product sales
    
    $
    5,339
    
    
    $
    8,788
    
    
    $
    (3,449
    )
    
    
    (39
    )%
  Cost of Product Sales
 Six Months EndedJune 30,
    
    
    
    
    
    %2006
    
    2005
    
    (Decrease)
    
    Change(in $000s)Cost of product sales
    
    $
    1,278
    
    
    $
    1,775
    
    
    $
    (497
    )
    
    
    (28
    )%
  Selling, General and Administrative
 Six Months EndedJune 30,
    
    
    
    
    
    %2006
    
    2005
    
    Increase
    
    Change(in $000s)Selling, general and administrative expense
    
    $
    8,411
    
    
    $
    4,842
    
    
    $
    3,569
    
    
    
    74
    %
  19




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##### Table of Contents



Research and Development
 Six Months EndedJune 30,
    
    
    
    
    
    %2006
    
    2005
    
    Increase
    
    Change(in $000s)Research and development
    
    $
    1,088
    
    
    $
    1,061
    
    
    $
    27
    
    
    
    3
    %
  Depreciation and Amortization
 Six Months EndedJune 30,
    
    
    
    
    
    %2006
    
    2005
    
    (Decrease)
    
    Change(in $000s)Depreciation and amortization
    
    $
    124
    
    
    $
    634
    
    
    $
    (510
    )
    
    
    (80
    )%
  Other Income and Expense Items
 Six Months EndedJune 30,
    
    Increase/2006
    
    2005
    
    (Decrease)(in $000s)Non-cash amortization of deemed discount on convertible debentures
    
    $
    
    
    
    $
    (108
    )
    
    $
    (108
    )Interest income
    
    
    332
    
    
    
    58
    
    
    
    274Interest expense
    
    
    
    
    
    
    (209
    )
    
    
    (209
    )Other income, net
    
    
    
    
    
    
    1
    
    
    
    (1
    )Rental income (expense), net
    
    
    (22
    )
    
    
    114
    
    
    
    (136
    )
   20




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Series B Preferred Stock Dividends
   Liquidity and Capital Resources
      21




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22




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Recently Issued Accounting Standard
 Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109 Accounting for Income
Taxes
 
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
    
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  1.
    
    Election of Directors to hold office until the 2007 Annual Meeting of Shareholders and
until their successors are duly elected and qualified.
 Votes For
    
    Votes WithheldAlbert Hansen
    
    
    47,197,097
    
    
    
    1,046,001Don M. Bailey
    
    
    47,395,762
    
    
    
    847,336Neal C. Bradsher
    
    
    47,411,478
    
    
    
    831,620James L. Fares
    
    
    47,423,013
    
    
    
    820,085Gregg Lapointe
    
    
    47,208,813
    
    
    
    1,034,285Virgil D. Thompson
    
    
    47,094,054
    
    
    
    1,149,044
 2.
    
    Approval of the adoption of the Companys 2006 Equity Incentive Award Plan.
 For:
    
    
    26,542,059Against:
    
    
    1,935,473Abstain:
    
    
    734,336Not-Voted:
    
    
    19,031,230
 3.
    
    Approval of the amendment to the Companys 2003 Employee Stock Purchase Plan.
 For:
    
    
    27,758,976Against:
    
    
    661,726Abstain:
    
    
    791,165Not-Voted:
    
    
    19,031,231
 4.
    
    Ratification of Odenberg Ullakko Muranishi & Co. LLP as the Companys independent
auditors for the fiscal year ending December 31, 2006.
 For:
    
    
    47,399,402Against:
    
    
    58,769Abstain:
    
    
    784,927
 
 ITEM 5. OTHER INFORMATION
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ITEM 6. EXHIBITS
 Exhibit No.
    
    Description31
    
    Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32*
    
    Certifications pursuant to Section 906 of the Public Company Accounting Reform and Investor Act of 2002.
 
 *
    
    These certifications are being furnished solely to accompany this quarterly report pursuant
to 18 U.S.C. Section 1350, and are not being filed for purposes of Section 18 of the
Securities Exchange Act of 1934 and are not to be incorporated by reference into any filing of
Questcor Pharmaceuticals, Inc., whether made before or after the date hereof, regardless of
any general incorporation language in such filing. 25




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SIGNATURES
  QUESTCOR PHARMACEUTICALS, INC.Date: August 11, 2006
    By:
    /s/ James L. FaresJames L. FaresPresident and Chief Executive OfficerBy:
    /s/ George StuartGeorge StuartVice President, Finance and Chief Financial Officer 26




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Exhibit Index
 Exhibit No.
    
    Description31
    
    Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32*
    
    Certifications pursuant to Section 906 of the Public Company Accounting Reform and Investor Act of 2002.
 
 *
    
    These certifications are being furnished solely to accompany this quarterly report pursuant
to 18 U.S.C. Section 1350, and are not being filed for purposes of Section 18 of the
Securities Exchange Act of 1934 and are not to be incorporated by reference into any filing of
Questcor Pharmaceuticals, Inc., whether made before or after the date hereof, regardless of
any general incorporation language in such filing.