##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year ended
    December 31, 2007Oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission file number
    001-14758
 Questcor Pharmaceuticals,
    Inc.
 (Exact name of registrant as
    specified in its charter)
  California

33-0476164(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)3260 Whipple Road

94587Union City, California

(Zip Code)(Address of principal executive
    offices)   Registrants telephone number, including area code:
 (510) 400-0700
 Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, no par value

American Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
 None
 (Title of class)
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  o Large
    accelerated filer

o Accelerated
    filer

þ Non-accelerated
    filer
    (Do not check if a smaller reporting company)

o Smaller
    reporting company   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




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##### 





ANNUAL
    REPORT ON
    FORM 10-K
    FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007
  
  TABLE OF CONTENTS
  PagePART IItem 1.


Business


3Item 1A.


Risk Factors


11Item 1B.


Unresolved Staff Comments


18Item 2.


Properties


18Item 3.


Legal Proceedings


19Item 4.


Submission of Matters to a Vote of Security
    Holders


19PART IIItem 5.


Market for Registrants Common Equity;
    Related Shareholder Matters and Issuer Purchases of Equity
    Securities


19Item 6.


Selected Consolidated Financial Data


21Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


22Item 7A.


Quantitative and Qualitative Disclosures about
    Market Risk


45Item 8.


Financial Statements and Supplementary Data


46Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


46Item 9A.


Controls and Procedures


46Item 9B.


Other Information


47PART IIIItem 10.


Directors and Executive Officers of the
    Registrant


47Item 11.


Executive Compensation


47Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Shareholder Matters


48Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


48Item 14.


Principal Accountant Fees and Services


48PART IVItem 15.


Exhibits and Financial Statement Schedules


48Signatures


54EXHIBIT 23.1EXHIBIT 31EXHIBIT 32   2




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PART I  Item 1.
    Business    Overview
  ® ® and/or
       3




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® tm
      ® ®
  (510) 400-0700. http://www.questcor.com.
  H.P.
    Acthar Gel
   4




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Risk Factors: If
    competitors develop and market products that are similar to
    ours, our commercial opportunity will be reduced or
    eliminated
      Doral
   5




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and/or
      Product
    Development
  ® tm
  tm ® tm tm tm
   6




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##### Table of Contents



Manufacturing
            Divested
    Product Lines
   7




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##### Table of Contents



Sales and
    Marketing
    Beacon
    Pharmaceuticals, Ltd.
    IDIS
    Limited
    Competition
          Risk Factors: If
    competitors develop and market products that are similar to
    ours, our commercial opportunity will be reduced or
    eliminated
 8




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Government
    Regulation
  Marketed
    Pharmaceutical Products
            Risk Factors: We cannot provide assurances
    that we will remain in compliance with all regulatory
    requirements
  Drugs
    in Development
   9




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Product
    Liability Insurance
  Risk Factors: If product liability lawsuits are
    successfully brought against us or we become subject to other
    forms of litigation, we may incur substantial liabilities and
    costs and may be required to limit commercialization of our
    products
  Patents
    and Proprietary Rights
        Risk Factors: If we are unable to protect our
    proprietary rights, we may lose our competitive position and
    future revenues
  Employees
     10




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##### Table of Contents



Website
    Address
  http://www.questcor.com. Form 10-K, Form 10-Q, Form 8-K,
  Financial
    Information
    Item 1A.
    Risk
    Factors  Risks
    Associated with the Implementation of our new Strategy and
    Business Model for Acthar
  Summary
    Overview
    We may
    be negatively affected by lower reimbursement
    levels.
     11




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Regulatory
    changes could negatively affect the implementation of our new
    strategy.
    We are
    in the process of identifying a long term
    strategy.
    Risks
    Associated with our Business
  We
    have a history of operating losses and have only recently
    generated sufficient revenue to achieve
    profitability.
      We may
    not be able to fully utilize for our benefit our cumulative net
    operating losses.
   12




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We may
    experience Acthar distribution problems as a result of the
    outsourcing of our Acthar distribution functions to
    CuraScript.
    If
    competitors develop and market products that are similar to
    ours, our commercial opportunity will be reduced or
    eliminated.
             13




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If we
    are unable to contract with third party contract manufacturers,
    we may be unable to meet the demand for our products and lose
    potential revenues.
      The
    loss of our key management personnel could have an adverse
    impact on future operations.
    We are
    subject to numerous governmental regulations and it can be
    costly to comply with these regulations and to develop compliant
    products and processes.
    
    stall the marketing, selling and distribution of any products
    that we develop,
    impose significant additional costs on us,
    diminish any competitive advantages that we may attain, and
    decrease our ability to generate revenues and profits.   14




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We
    cannot predict whether the FDA will approve our sNDA for Acthar
    or for our other products in our development
    pipeline.
    We
    cannot provide assurances that we will remain in compliance with
    all regulatory requirements.
        Our
    current pipeline of new products is limited and any products
    that we may acquire or develop may not be accepted by the
    market, which may result in lower future revenues as well as a
    decline in our competitive positioning.
   15




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
    the establishment and demonstration of the clinical efficacy and
    safety of the product candidates,
    their potential advantage over alternative treatment methods and
    competing products,
    reimbursement policies of government and third party
    payors, and
    our ability to market and promote the products effectively.    If we
    are unable to protect our proprietary rights, we may lose our
    competitive position and future revenues.
    
    obtain patents for our products and technologies,
    protect trade secrets,
    operate without infringing upon the proprietary rights of
    others, and
    prevent others from infringing on our proprietary rights.         16




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If we
    fail to maintain an effective system of internal controls, we
    may not be able to accurately report our financial results. As a
    result, current and potential shareholders could lose confidence
    in our financial reporting, which could have a negative market
    reaction.
    If
    product liability lawsuits are successfully brought against us
    or we become subject to other forms of litigation, we may incur
    substantial liabilities and costs and may be required to limit
    commercialization of our products.
    Risks
    Related to our Common Stock
  Our
    stock price has a history of volatility, and an investment in
    our stock could decline in value.
    We
    have significant stock option overhang which could dilute your
    investment.
   17




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We may
    seek additional funding which would dilute your
    investment.
      
    existing product sales performance,
    achieving better operating efficiencies,
    maintaining customer compliance with our policies, and
    obtaining product from our sole-source contract manufacturers.    If our
    officers, directors and largest shareholders choose to act
    together, they could exert significant influence over the
    outcome of a shareholder vote.
   Item 1B.Unresolved
    Staff Comments    Item 2.
    Properties       18




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Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders   PART II  Item 5.
    Market
    for Registrants Common Equity; Related Shareholder Matters
    and Issuer Purchases of Equity Securities  Price
    Range of Common Stock; Holders of Record
    Common StockClosing PriceQuarter Ended

High


LowDecember 31, 2007

$
6.15


$
0.75September 30, 2007


0.63



0.35June 30, 2007


1.08



0.44March 31, 2007


1.54



0.80December 31, 2006


1.65



1.08September 30, 2006


1.89



1.53June 30, 2006


2.45



1.46March 31, 2006


1.65



0.85     Dividends
    Equity
    Compensation Plans
   19




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Stock
    Performance Graph
    Comparison
    of 5 Year Cumulative Total Return*
     COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN* Among
    Questcor Pharmaceuticals, Inc., The AMEX Composite Index
    And The NASDAQ Pharmaceutical Index
  
  Cumulative Total Return*12/02

12/03

12/04

12/05

12/06

12/07QUESTCOR PHARMACEUTICALS, INC.


100.00



75.51



54.08



106.13



151.02



588.78AMEX COMPOSITE INDEX


100.00



143.18



175.20



215.26



257.04



299.37NASDAQ PHARMACEUTICAL INDEX


100.00



144.89



160.46



160.65



163.42



154.46   *
    
    $100 invested on 12/31/02 in stock or index-including
    reinvestment of dividends. Fiscal year ended December 31.   20




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Item 6.
    Selected
    Consolidated Financial Data    Years Ended December 31,2007(1)


2006


2005


2004


2003(In thousands, except per share data)Consolidated Statement of Operations Data:Net product sales

$
49,768


$
12,788


$
14,162


$
18,404


$
13,655Total revenues


49,768



12,788



14,162



18,404



14,063Total operating costs and expenses


28,213



23,631



16,351



18,670



17,397Income (loss) from operations


21,555



(10,843
)


(2,189
)


(266
)


(3,334
)Gain on sale of product lines


448







9,642







Income tax expense (benefit)(2)


(14,592
)






200







Net income (loss)


37,586



(10,109
)


7,392



(832
)


(3,791
)Net income (loss) applicable to common shareholders


36,449



(10,109
)


5,068



(1,508
)


(5,947
)Net income (loss) per share applicable to common
    shareholders  basic

$
0.53


$
(0.18
)

$
0.10


$
(0.03
)

$
(0.14
)Net income (loss) per share applicable to common
    shareholders  diluted

$
0.51


$
(0.18
)

$
0.10


$
(0.03
)

$
(0.14
)Shares used in computing net income (loss) per share applicable
    to common shareholders  basic


69,131



56,732



52,477



50,844



41,884Shares used in computing net income (loss) per share applicable
    to common shareholders  diluted


70,915



56,732



53,323



50,844



41,884   December 31,2007(1)


2006


2005


2004


2003(In thousands)Consolidated Balance Sheet Data:Cash, cash equivalents and short-term investments

$
30,212


$
18,425


$
26,577


$
8,729


$
3,220Working capital


57,153



17,506



16,121



5,082



4,352Total assets


78,448



29,635



31,348



28,173



22,929Long-term debt














1,986



3,402Preferred stock, Series A(3)


5,081



5,081



5,081



5,081



5,081Preferred stock, Series B(4)










7,841



7,578



8,278Common stock


108,387



105,352



90,576



88,436



85,232Accumulated deficit


(51,670
)


(89,256
)


(79,147
)


(84,423
)


(82,915
)Total shareholders equity


56,771



16,097



11, 422



11,581



10,578     (1)
    
    On August 27, 2007, we announced a new strategy and
    business model for Acthar that resulted in a significant
    increase in net sales, earnings, and cash flows for the year
    ended December 31, 2007. Please refer to Item 7,
    Managements Discussion and Analysis of Financial
    Condition and Results of Operations, for further
    discussion regarding the implementation of the new Acthar
    strategy.(2)
    
    The income tax benefit for the year ended December 31, 2007
    resulted from our ability to utilize net operating loss
    carryforwards to offset the majority of our 2007 taxable income
    and the reversal of the portion of the 21




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valuation allowance established against deferred tax assets
    available to reduce the tax obligations on our 2008 taxable
    income.  (3)
    
    The Series A Preferred Stock was repurchased in February
    2008 for $10.3 million. Please refer to
    Note 17  Subsequent Eventsin the
    accompanying Notes to Consolidated Financial Statements for
    further discussion.(4)
    
    Series B Convertible Preferred Stock (Series B
    Preferred Stock) was reported at its redemption amount and
    as a current liability as of December 31, 2005. The
    Series B Preferred Stock was redeemed in January 2006.  QUARTERLY
    FINANCIAL INFORMATION (UNAUDITED)
  Quarter Ended12/31/07(1)


09/30/07(1)


06/30/07


03/31/07(In thousands, except per share data)Net product sales

$
27,114


$
14,809


$
4,144


$
3,701Cost of product sales


1,997



1,534



914



850Income tax expense (benefit)(2)


(14,694
)


102







Net income (loss)


34,437



8,625



(1,717
)


(3,759
)Net income (loss) applicable to common shareholders


33,402



8,364



(1,717
)


(3,759
)Net income (loss) per share applicable to common shareholders:Basic

$
0.48


$
0.12


$
(0.02
)

$
(0.05
)Diluted

$
0.45


$
0.12


$
(0.02
)

$
(0.05
)Quarter Ended12/31/06


09/30/06


06/30/06


03/31/06(In thousands, except per share data)Net product sales

$
3,404


$
4,045


$
3,329


$
2,010Cost of product sales


777



945



652



626Net loss


(3,336
)


(1,521
)


(2,215
)


(3,037
)Net loss applicable to common shareholders


(3,336
)


(1,521
)


(2,215
)


(3,037
)Net loss per share applicable to common shareholders 
    basic and diluted

$
(0.06
)

$
(0.03
)

$
(0.04
)

$
(0.06
)     (1)
    
    On August 27, 2007, we announced a new strategy and
    business model for Acthar that resulted in a significant
    increase in net sales, earnings and cash flows for the quarters
    ended September 30, 2007 and December 31, 2007. Please
    refer to Item 7, Managements Discussion and
    Analysis of Financial Condition and Results of Operations,
    for further discussion regarding the implementation of the new
    Acthar strategy.(2)
    
    The income tax benefit for the quarter ended December 31,
    2007 resulted from our ability to utilize net operating loss
    carryforwards to offset the majority of our 2007 taxable income
    and the reversal of the portion of the valuation allowance
    established against deferred tax assets available to reduce the
    tax obligations on our 2008 taxable income.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations     22




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Overview
  and/or
       23




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® tm
        Critical
    Accounting Policies and Use of Estimates
   24




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Sales
    Reserves
         25




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##### Table of Contents



December 31,2007


2006(In $000s)Balance, beginning of year

$
2,351


$
1,709Actual returns in current year related to sales from prior years


(1,571
)


(835
)Actual returns in current year related to sales from current year


(86
)


Current provision related to sales made in prior years


(86
)


(194
)Current provision related to sales made in current year


699



1,671Balance, end of year

$
1,307


$
2,351            26




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##### Table of Contents



December 31,2007


2006(In $000s)Product returns  credit memoranda policy

$
1,307


$
2,351Product returns  product replacement policy


31



Medicaid rebates


6,514



377Government chargebacks


222



56Other


102



$
8,176


$
2,784   Inventories
    Intangible
    and Long-Lived Assets
  Goodwill and Other
    Intangible Assets Accounting for the Impairment or Disposal of Long-Lived
    Assets
 27




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Share-Based
    Compensation
  Share-Based Payment
  Accounting
    for Stock Issued to Employees, Accounting for
    Stock-Based Compensation Accounting for Stock-Based
    Compensation-Transition and Disclosure
  12-month
  Lease
    Termination Liability
   28




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##### Table of Contents



Accounting for a Loss on a
    Sublease, an interpretation of FASB 13 and APB Opinion
    No. 30 79-15, Accounting for the Loss on a Sublease Not Involving the
    Disposal of a Segment.
    Income
    Taxes
       29




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##### Table of Contents



Accounting for Uncertainty
    in Income Taxes  an interpretation of FASB Statement
    No. 109, Income Taxes
  Results
    of Operations
  Year
    ended December 31, 2007 compared to year ended
    December 31, 2006:
  Total
    Net Product Sales
  Years EndedDecember 31,





%2007


2006


Increase


Change(In $000s)Net product sales

$
49,768


$
12,788


$
36,980



289
%      30




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31




---



##### Table of Contents



Cost
    of Product Sales
  Years EndedDecember 31,





%2007


2006


Increase


Change(In $000s)Cost of product sales

$
5,295


$
3,000


$
2,295



77
%       Selling,
    General and Administrative
  Years EndedDecember 31,





%2007


2006


Increase


Change(In $000s)Selling, general and administrative expense

$
17,662


$
17,282


$
380



2
%        32




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##### Table of Contents



12-month
  Research
    and Development
  Years EndedDecember 31,





%2007


2006


Increase


Change(In $000s)Research and development

$
4,758


$
3,033


$
1,725



57
%       Depreciation
    and Amortization
  Years EndedDecember 31,





%2007


2006


Increase


Change(In $000s)Depreciation and amortization

$
498


$
316


$
182



58
%    33




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##### Table of Contents



Other
    Income and Expense
  Years EndedDecember 31,2007


2006


Increase(In $000s)Interest income

$
762


$
607


$
155Other income, net


229



127



102Gain on sale of product rights


448







448     Income
    Tax Expense (Benefit)
  Years EndedDecember 31,2007


2006


Increase(In $000s)Income tax expense (benefit)

$
(14,592
)

$



$
14,592      34




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##### Table of Contents



Net
    Income (Loss)
  Years EndedDecember 31,2007


2006


Increase(In $000s)Net income (loss)

$
37,586


$
(10,109
)

$
47,695     Allocation
    of Undistributed Earnings to Series A Preferred
    Stock
  Years EndedDecember 31,2007


2006


Increase(In $000s)Allocation of undistributed earnings to Series A Preferred
    Stock

$
1,137


$



$
1,137      35




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##### Table of Contents



Net
    Income (Loss) Applicable to Common Shareholders
  Years EndedDecember 31,2007


2006


Increase(In $000s)Net income (loss) applicable to common shareholders

$
36,449


$
(10,109
)

$
46,558     Year
    ended December 31, 2006 compared to year ended
    December 31, 2005:
  Total
    Net Product Sales
  Years EndedDecember 31,





%2006


2005


(Decrease)


Change(In $000s)Net product sales

$
12,788


$
14,162


$
(1,374
)


(10
)%     Net
    product sales by therapeutic area:
  Years EndedDecember 31,


Increase/


%2006


2005


(Decrease)


Change(In $000s)Neurology

$
12,788


$
8,425


$
4,363



52
%Product lines divested in 2005






5,666



(5,666
)


(100
)%Co-promotion agreement terminated in 2005






71



(71
)


(100
)%   Neurology
    Net Product Sales
     36




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##### Table of Contents



Cost
    of Product Sales
  Years EndedDecember 31,





%2006


2005


(Decrease)


Change(In $000s)Cost of product sales

$
3,000


$
3,110


$
(110
)


(4
)%       Selling,
    General and Administrative
  Years EndedDecember 31,





%2006


2005


Increase


Change(In $000s)Selling, general and administrative expense

$
17,282


$
10,019


$
7,263



72
%     Research
    and Development
  Years EndedDecember 31,





%2006


2005


Increase


Change(In $000s)Research and development

$
3,033


$
2,227


$
806



36
%    37




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##### Table of Contents



Depreciation
    and Amortization
  Years EndedDecember 31,





%2006


2005


(Decrease)


Change(In $000s)Depreciation and amortization

$
316


$
995


$
(679
)


(68
)%       Other
    Income and Expense
  Years EndedDecember 31,


Increase/2006


2005


(Decrease)(In $000s)Non-cash amortization of deemed discount on convertible
    debentures

$



$
(108
)

$
(108
)Interest income


607



271



336Interest expense






(275
)


(275
)Other income, net


127



8



119Rental income, net






243



(243
)Gain on sale of product lines






9,642



(9,642
)        38




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##### Table of Contents



Accounting for the Impairment of
    Long-lived Assets
  Income
    Tax Expense
  Years EndedDecember 31,2006


2005


(Decrease)(In $000s)Income tax expense

$



$
200


$
(200
)     Net
    Income (Loss)
  Years EndedDecember 31,2006


2005


(Decrease)(In $000s)Net income (loss)

$
(10,109
)

$
7,392


$
(17,501
)     Preferred
    Stock Dividends and Distributions
  Years EndedDecember 31,2006


2005


(Decrease)(In $000s)Non-cash deemed dividend related to beneficial conversion
    feature of Series B Preferred Stock

$



$
84


$
(84
)Deemed dividend related to redemption of Series B Preferred
    Stock






1,361



(1,361
)Dividends on Series B Preferred Stock






671



(671
)Allocation of undistributed earnings to Series A Preferred
    Stock






208



(208
)      39




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##### Table of Contents



Net
    Income (Loss) Applicable to Common Shareholders
  Years EndedDecember 31,2006


2005


(Decrease)(In $000s)Net income (loss) applicable to common shareholders

$
(10,109
)

$
5,068


$
(15,177
)     Liquidity
    and Capital Resources
      40




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##### Table of Contents



Years Ended December 31,Liquidity and Capital Resources

2007


2006


2005(In $000s)Cash, cash equivalents and short-term investments

$
30,212


$
18,425


$
26,577Accounts receivable, net


23,639



1,783



725Working capital


57,153



17,506



16,121Cash provided by/(used in):Operating activities


10,066



(9,728
)


1,367Investing activities


(11,288
)


(554
)


16,419Financing activities


1,224



5,781



(6,077
)       Operating
    Cash Flows
        Investing
    Cash Flows
   41




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##### Table of Contents



Financing
    Cash Flows
        Off
    Balance Sheet Arrangements
    Contractual
    Obligations
  Payments Due by Period1 Year


Greater than


4 to 5


After 5Total


or Less


1 to 3 Years


Years


Years(In $000s)Minimum payments remaining under operating leases(1)

$
6,297


$
1,474


$
2,949


$
1,874


$
Purchase orders and obligations(2)


655



322



333







Total contractual cash obligations

$
6,952


$
1,796


$
3,282


$
1,874


$
  42




---



##### Table of Contents



(1)
    
    As of December 31, 2007 we leased two buildings with lease
    terms expiring in 2011 and 2012. We have also entered into
    various office equipment leases and automobile leases, the terms
    of which are typically three years. Annual rent expense for all
    of our facilities, equipment and automobile leases for the year
    ended December 31, 2007 was approximately $954,000. We
    lease our headquarters in Union City, California, with
    23,000 square feet of office space under a lease agreement
    that expires in 2011. Annual rent payments for 2008 for this
    facility are $569,000. We also lease a 30,000 square foot
    facility in Hayward, California under a lease agreement that
    expires in 2012. We do not occupy this facility and subleased
    5,000 and 25,000 square feet of the facility effective
    November 1, 2007 and February 1, 2008, respectively.
    These subleases cover a portion of our lease commitment and all
    of our insurance, taxes and common area maintenance. We
    anticipate that we will receive $328,000 in 2008 as sublease
    income to be used to pay a portion of our 2008 Hayward facility
    annual rent expense of $808,000.(2)
    
    Represents our purchase orders and obligations as of
    December 31, 2007 for which the goods have not yet been
    received or the services have not yet been rendered. The amount
    also includes $500,000 relating to an agreement with Biovectra
    dcl dated January 22, 2008.  and/or
  Equity
    Transactions
       43




---



##### Table of Contents



Cash
    Requirements
        Recently
    Issued Accounting Standards
  Business Combinations
  Noncontrolling Interests in Consolidated Financial
    Statements  an amendment of ARB No. 51
  No. 07-03, Accounting for Non-Refundable Advance Payments for Goods or
    Services to Be Used in Future Research and Development
    Activities No. 07-03). No. 07-03
 44




---



##### Table of Contents



No. 07-03 No. 07-03
  The
    Fair Value Option for Financial Assets and Financial Liabilities
  Fair Value Measurements
  Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk  Market
    Rate Risk
    Fair ValueDecember 31,2007


2007(In thousands, except interest rates)Cash, cash equivalents and short-term investments

$
30,212


$
30,212Average interest rate


4.87
%


   Fair ValueDecember 31,2006


2006(In thousands, except interest rates)Cash, cash equivalents and short-term investments

$
18,425


$
18,425Average interest rate


4.77
%


  45




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  QUESTCOR
    PHARMACEUTICALS, INC.
  CONTENTS
  PageReport of Independent Registered Public
    Accounting Firm


55Audited Financial StatementsConsolidated Balance Sheets


56Consolidated Statements of Operations


57Consolidated Statements of Preferred Stock and
    Shareholders Equity


58Consolidated Statements of Cash Flows


59Notes to Consolidated Financial Statements


60Financial Statement Schedules


89   Item 9.
    Changes
    In and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
    Rule 13a-15(b),
  Managements
    Annual Report on Internal Control over Financial
    Reporting
       46




---



##### Table of Contents



Internal Control-Integrated Framework
      Item 9B.
    Other
    Information   PART III  Item 10.
    Directors
    and Executive Officers of the Registrant    Item 11.
    Executive
    Compensation   47




---



##### Table of Contents



Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Shareholder Matters    Number of





Number of SharesShares to be


Weighted-


Remaining Available forIssued Upon


Average Exercise


Future Issuance UnderExercise of


Price of


Equity CompensationOutstanding


Outstanding


Plans (Excluding SharesOptions


Options


Reflected in Column (a))Plan Category

(a)


(b)


(c)Equity compensation plans approved by shareholders


5,602,425


$
0.92



5,302,774Equity compensation plans not approved by shareholders


N/A



N/A



N/ATotal


5,602,425


$
0.92



5,302,774     Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accountant Fees and Services   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules    Financial Statements.
  PageReport of Independent Registered Public Accounting Firm


55Consolidated Balance Sheets


56Consolidated Statements of Operations


57Consolidated Statements of Preferred Stock and
    Shareholders Equity


58Consolidated Statements of Cash Flows


59Notes to Financial Statements


60   Financial Statement Schedules.
  (c)
    Exhibits  ExhibitNumber

Description1
.1(31)

Placement Agency Agreement dated December 7, 2006 by and
    between Questcor Pharmaceuticals, Inc. and BMO Capital Markets
    Corp. 48




---



##### Table of Contents



ExhibitNumber

Description1
.2(31)

Form of Purchase Agreement.2
.1(1)

Merger agreement entered into August 4, 1999, by and among
    Cyprus Pharmaceutical Corporation, a California corporation
    (Parent), Cyprus Acquisition Corporation, a Delaware
    corporation and a wholly owned subsidiary of Parent, and
    RiboGene, Inc., a Delaware corporation.2
.2(27)

Assignment and Assumption Agreement by and between Questcor
    Pharmaceuticals, Inc. and Medpointe Inc., dated as of
    May 4, 2006.3
.1(2)

Amended and Restated Articles of Incorporation of the Company.3
.2(25)

Certificate of Amendment to the Questcor Pharmaceuticals, Inc.
    Bylaws, dated as of March 2, 2006.3
.3(3)

Certificate of Determination of Series B Convertible
    Preferred Stock of the Company.3
.4(4)

Certificate of Determination of Series C Junior
    Participating Preferred Stock of the Company.3
.5(5)

Amended and Restated Bylaws of the Company, dated as of
    March 5, 2008.4
.1(6)

Convertible Debenture between the Company and SF Capital
    Partners Ltd. dated March 15, 2002.4
.2(6)

Convertible Debenture between the Company and Defiante
    Farmaceutica Unipessoal Lda dated March 15, 2002.10
.1(7)

Forms of Incentive Stock Option and Non-statutory Stock Option.10
.2(8)

1992 Employee Stock Option Plan, as amended.10
.3(9)

1993 Non-employee Directors Equity Incentive Plan, as
    amended and related form of Nonstatutory Stock Option.10
.4(10)

2000 Employee Stock Purchase Plan.10
.5(11)

Asset Purchase Agreement dated July 27, 2001 between the
    Company and Aventis Pharmaceuticals Products, Inc..10
.6(11)

First Amendment to Asset Purchase Agreement dated
    January 29, 2002, between the Company and Aventis
    Pharmaceuticals Products, Inc.10
.7(12)

Stock Purchase Agreement dated July 31, 2001 between
    Registrant and Sigma-Tau Finance Holding S.A.10
.8(13)

Warrant dated December 1, 2001 between the Company and
    Paolo Cavazza.10
.9(13)

Warrant dated December 1, 2001 between the Company and
    Claudio Cavazza.10
.10(6)

Securities Purchase Agreement between the Company and SF Capital
    Partners Ltd. dated March 15, 2002.10
.11(6)

Registration Rights Agreement between the Company and SF Capital
    Partners Ltd. dated March 15, 2002.10
.12(6)

Warrant between the Company and SF Capital Partners Ltd. dated
    March 15, 2002.10
.13(6)

Securities Purchase Agreement between the Company and Defiante
    Farmaceutica Unipessoal Lda dated March 15, 2002.10
.14(6)

Registration Rights Agreement between the Company and Defiante
    Farmaceutica Unipessoal Lda dated March 15, 2002.10
.15(6)

Warrant between the Company and Defiante Farmaceutica Unipessoal
    Lda dated March 15, 2002.10
.16(3)

Form of Common Stock Purchase Warrant dated January 15,
    2003 issued by the Company to purchasers of Series B
    Convertible Preferred Stock.10
.17(4)

Rights Agreement, dated as of February 11, 2003, between
    the Company and Computershare Trust Company, Inc.10
.18(3)

Form of Subscription Agreement dated as of December 29,
    2002 by and between the Company and purchasers of Series B
    Convertible Preferred Stock and Common Stock Purchase Warrants.10
.19(14)

Letter Agreement dated September 2, 2003 between the
    Company and R. Jerald Beers.10
.20(14)

Amendment to Letter Agreement dated November 6, 2003
    between the Company and R. Jerald Beers.10
.21(14)

Supply Agreement dated April 1, 2003 between the Company
    and BioVectra, dcl.10
.22(15)

Separation Agreement dated August 5, 2004 between the
    Company and Charles J. Casamento. 49




---



##### Table of Contents



ExhibitNumber

Description10
.23(16)

Secured Promissory Note and Security Agreement dated
    July 31, 2004 between the Company and Defiante Farmaceutica
    Lda.10
.24(17)

Letter Agreement between the Company and James L. Fares dated
    February 17, 2005.10
.25(18)

Amendment dated March 8, 2005 to the 8% Convertible
    Debenture dated March 15, 2002 issued by Questcor
    Pharmaceuticals, Inc. in favor of Defiante Farmaceutica Lda.10
.26(18)

Amendment dated March 10, 2005 to the 8% Convertible
    Debenture dated March 15, 2002 issued by Questcor
    Pharmaceuticals, Inc. in favor of SF Capital Partners Ltd.10
.27(19)

2004 Non-Employee Directors Equity Incentive Plan.10
.28(20)

Letter Agreement between the Company and Reinhard Koenig dated
    September 30, 2004.10
.29(20)

Letter Agreement between the Company and James L. Fares dated
    February 18, 2005.10
.30(20)

Letter Agreement between the Company and Steve Cartt dated
    March 7, 2005.10
.31(20)

Letter Agreement between the Company and Steve Cartt dated
    March 8, 2005.10
.32(20)

Letter Agreement between the Company and Reinhard Koenig dated
    February 3, 2004.10
.33(20)

Letter Agreement between the Company and Barbara J. McKee dated
    February 9, 2005.10
.34(20)

Separation Agreement and Release dated March 3, 2005
    between the Company and R. Jerald Beers.10
.35(20)

Series B Preferred Shareholder Agreement and Waiver dated
    March 29, 2005 by and between the Company and all of the
    holders of the outstanding shares of Series B Preferred
    Stock of the Company.10
.36(22)

First Amendment, dated as of September 9, 2005, to Rights
    Agreement dated as of February 11, 2003, between Questcor
    Pharmaceuticals, Inc. and Computershare Trust Company, Inc.10
.37(23)

Offer of Employment Letter Agreement between the Company and
    George Stuart dated September 27, 2005.10
.38(23)

Change-in-Control
    Letter Agreement between the Company and George Stuart dated
    September 28, 2005.10
.39(23)

Severance Letter Agreement between the Company and George Stuart
    dated September 28, 2005.10
.40(24)

Asset Purchase Agreement dated October 17, 2005 by and
    between Questcor Pharmaceuticals, Inc. and QOL Medical LLC.10
.41(26)

Offer of Employment Letter Agreement between the Company and
    Craig C. Chambliss dated March 31, 2005.10
.42(26)

Change-in-Control
    Letter Agreement between the Company and Craig C. Chambliss
    dated May 1, 2005.10
.43(26)

Severance Letter Agreement between the Company and Craig C.
    Chambliss dated May 4, 2005.10
.44(26)

Severance Letter Agreement between the Company and David
    Medeiros dated July 10, 2003.10
.45(28)

2006 Equity Incentive Award Plan.10
.46(29)

Form of Incentive Stock Option Agreement under the 2006 Equity
    Incentive Award Plan.10
.47(29)

Form of Non-Qualified Stock Option Agreement under the 2006
    Equity Incentive Award Plan.10
.48(29)

Form of Restricted Stock Award Agreement under the 2006 Equity
    Incentive Award Plan.10
.49(28)

2003 Employee Stock Purchase Plan, as amended.10
.50(30)

Offer of Employment Letter Agreement between the Company and
    Steven Halladay dated October 13, 2006.10
.51(30)

Change-in-Control
    Letter Agreement between the Company and Steven Halladay dated
    October 16, 2006.10
.52(30)

Severance Letter Agreement between the Company and Steven
    Halladay dated October 16, 2006.10
.53(30)

Offer of Employment Letter Agreement between the Company and
    Eric Liebler dated August 1, 2006.10
.54(30)

Amendment to Offer of Employment Letter Agreement between the
    Company and Eric Liebler dated October 13, 2006.10
.55(30)

Change-in-Control
    Letter Agreement between the Company and Eric Liebler dated
    August 1, 2006. 50




---



##### Table of Contents



ExhibitNumber

Description10
.56(30)

Severance Letter Agreement between the Company and Eric Liebler
    dated August 1, 2006.10
.57(32)

Amended Change of Control Letter Agreement between the Company
    and James L. Fares dated February 13, 2007.10
.58(32)

Amended Change of Control Letter Agreement between the Company
    and Stephen L. Cartt dated February 13, 2007.10
.59(32)

Amended Change of Control Letter Agreement between the Company
    and Eric J. Liebler dated February 13, 2007.10
.60(32)

Amended Change of Control Letter Agreement between the Company
    and George M. Stuart dated February 13, 2007.10
.61(32)

Amended Change of Control Letter Agreement between the Company
    and Craig C. Chambliss dated February 13, 2007.10
.62(32)

Amended Change of Control Letter Agreement between the Company
    and Steven Halladay dated February 13, 2007.10
.63(32)

Change of Control Letter Agreement between the Company and David
    J. Medeiros dated February 13, 2007.10
.64(33)

Termination Agreement and General Release related to James L.
    Fares departure as Chief Executive Officer of the Company
    dated June 20, 2007.10
.65(34)

Form of Performance-Based Vesting Stock Option Agreement under
    the 2006 Equity Incentive Award Plan.10
.66(35)

Severance Agreement between the Company and David J. Medeiros
    dated July 16, 2007.10
.67(36)

Separation Agreement and General Release related to Eric J.
    Lieblers resignation as Senior Vice President, Strategic
    Planning and Communications of the Company dated August 3,
    2007.10
.68(37)

Form of Option Agreement for Director Options.10
.69(37)

Form of Option Agreement for Committee Options.16
.1(21)

Letter to the Security and Exchange Commission from
    Ernst & Young LLP.23
.1*

Consent of Odenburg, Ullakko, Muranishi & Co. LLP,
    Independent Registered Public Accounting Firm.31*


Certification pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002.32*


Certification pursuant to Section 906 of the Public Company
    Accounting Reform and Investor Act of 2002.     *
    
    Filed herewith.(1)
    
    Filed as an exhibit to the Companys Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 1999, and
    incorporated herein by reference.(2)
    
    Filed as an exhibit to the Companys Registration Statement
    on
    Form S-8,
    Registration Statement
    No. 333-30558,
    filed on February 16, 2000, and incorporated herein by
    reference.(3)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on January 16, 2003, and incorporated herein by
    reference.(4)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on February 14, 2003, and incorporated herein by
    reference.(5)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    on March 5, 2008, and incorporated herein by reference.(6)
    
    Filed as an exhibit to the Companys Registration Statement
    on
    Form S-3,
    Registration
    No. 333-85160,
    filed on March 28, 2002, and incorporated herein by
    reference.(7)
    
    Filed as an exhibit to the Companys Registration Statement
    on
    Form S-1,
    Registration
    No. 33-51682,
    and incorporated herein by reference. 51




---



##### Table of Contents



(8)
    
    Filed as an exhibit to the Companys Proxy Statement for
    the 2002 Annual Meeting of Shareholders, filed on March 28,
    2002, and incorporated herein by reference.(9)
    
    Filed as an exhibit to the Companys Registration Statement
    Form S-4,
    Registration Statement
    No. 333-87611,
    filed on September 23, 1999, and incorporated herein by
    reference.(10)
    
    Filed as an exhibit to the Companys Registration Statement
    on
    Form S-8,
    Registration Statement
    No. 333-46990,
    filed on September 29, 2000, and incorporated herein by
    reference.(11)
    
    Filed as an exhibit to the Companys Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2002, and incorporated
    herein by reference.(12)
    
    Filed as an exhibit to the Companys Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2001, and incorporated
    herein by reference.(13)
    
    Filed as an exhibit to the Companys Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2001, and
    incorporated herein by reference.(14)
    
    Filed as an exhibit to the Companys Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2003, and
    incorporated herein by reference.(15)
    
    Filed as an exhibit to the Companys Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2004, and incorporated
    herein by reference.(16)
    
    Filed as an exhibit to the Companys Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2004, and incorporated
    herein by reference.(17)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on February 23, 2005, and incorporated herein by
    reference.(18)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on March 14, 2005, and incorporated herein by
    reference.(19)
    
    Filed as an exhibit to the Companys Proxy Statement for
    the 2004 Annual Meeting of Stockholders, filed on March 29,
    2004, and incorporated herein by reference.(20)
    
    Filed as an exhibit to the Companys Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2004, and
    incorporated herein by reference.(21)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on April 11, 2005, and incorporated herein by
    reference.(22)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on September 13, 2005, and incorporated herein by
    reference.(23)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on September 30, 2005, and incorporated herein by
    reference.(24)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on October 19, 2005, and incorporated herein by
    reference.(25)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on March 2, 2006, and incorporated herein by
    reference.(26)
    
    Filed as an exhibit to the Companys Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2005, and
    incorporated herein by reference.(27)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on May 10, 2006, and incorporated herein by reference.(28)
    
    Filed as an exhibit to the Companys Proxy Statement for
    the 2006 Annual Meeting of Shareholders, filed on April 10,
    2006, and incorporated herein by reference.(29)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on May 24, 2006, and incorporated herein by reference.(30)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on October 18, 2006, and incorporated herein by
    reference. 52




---



##### Table of Contents



(31)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on December 8, 2006, and incorporated herein by
    reference.(32)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on February 15, 2007, and incorporated herein by
    reference.(33)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on June 22, 2007, and incorporated herein by
    reference.(34)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on July 3, 2007, and incorporated herein by reference.(35)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on July 20, 2007, and incorporated herein by
    reference.(36)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on August 6, 2007, and incorporated herein by
    reference.(37)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on January 4, 2008, and incorporated herein by
    reference.
    
    The Company has requested confidential treatment with respect to
    portions of this exhibit. 53




---



##### Table of Contents



SIGNATURES      By
    /s/  DON
    M. BAILEY   President and Chief Executive Officer
      Signature

Title

Date/s/  DON
    M. BAILEYDon
    M. Bailey

President and Chief Executive Officer and Director (Principal
    Executive Officer)

March 18, 2008/s/  GEORGE
    STUARTGeorge
    Stuart

Senior Vice President, Finance and Chief Financial Officer
    (Principal Financial and Accounting Officer)

March 18, 2008/s/  VIRGIL
    D. THOMPSONVirgil
    D. Thompson

Chairman

March 18, 2008/s/  NEAL
    C. BRADSHERNeal
    C. Bradsher

Director

March 18, 2008/s/  STEPHEN
    C. FARRELLStephen
    C. Farrell

Director

March 18, 2008/s/  ROBERT
    J. RUBINRobert
    J. Rubin

Director

March 18, 2008/s/  DAVID
    YOUNGDavid
    Young

Director

March 18, 2008  54




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM           Accounting for Uncertainty in Income Taxes an
    Interpretation of FAS 109 Share-Based Payment
  ODENBERG,
    ULLAKKO, MURANISHI & CO. LLP
    55




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2007


2006(In thousands, except share amounts)ASSETSCurrent assets:Cash and cash equivalents

$
15,939


$
15,937Short-term investments


14,273



2,488Total cash, cash equivalents and short-term investments


30,212



18,425Accounts receivable, net of allowance for doubtful accounts of
    $57 and $55 at December 31, 2007 and 2006, respectively


23,639



1,783Inventories, net


2,365



2,965Prepaid expenses and other current assets


778



811Deferred tax assets


14,879



Total current assets


71,873



23,984Property and equipment, net


522



665Purchased technology, net


3,967



3,965Goodwill


299



299Deposits and other assets


744



722Deferred tax assets


1,043



Total assets

$
78,448


$
29,635LIABILITIES, PREFERRED STOCK AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable

$
1,777


$
2,154Accrued compensation


1,945



1,019Sales-related reserves


8,176



2,784Income taxes payable


1,330



Other accrued liabilities


1,492



521Total current liabilities


14,720



6,478Lease termination and deferred rent liabilities


1,869



1,961Other non-current liabilities


7



18Commitments and contingencies (see Note 10)Preferred stock, no par value, 7,500,000 shares authorized;
    2,155,715 Series A shares issued and outstanding at
    December 31, 2007 and 2006 (aggregate liquidation
    preference of $10,000 at December 31, 2007 and 2006)


5,081



5,081Shareholders equity:Common stock, no par value, 105,000,000 shares authorized;
    70,118,166 and 68,740,804 shares issued and outstanding at
    December 31, 2007 and 2006, respectively


108,387



105,352Accumulated deficit


(51,670
)


(89,256
)Accumulated other comprehensive income


54



1Total shareholders equity


56,771



16,097Total liabilities, preferred stock and shareholders equity

$
78,448


$
29,635    56




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##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Years Ended December 31,2007


2006


2005(In thousands, except per share amounts)Net product sales

$
49,768


$
12,788


$
14,162Operating costs and expenses:Cost of product sales (exclusive of amortization of purchased
    technology)


5,295



3,000



3,110Selling, general and administrative


17,662



17,282



10,019Research and development


4,758



3,033



2,227Depreciation and amortization


498



316



995Total operating costs and expenses


28,213



23,631



16,351Income (loss) from operations


21,555



(10,843
)


(2,189
)Other income (expense):Interest income


762



607



271Interest expense










(275
)Other income, net


229



127



8Rental income, net










243Gain on sale of product lines


448







9,642Non-cash amortization of deemed discount on convertible
    debentures










(108
)Total other income (expense)


1,439



734



9,781Net income (loss) before income taxes


22,994



(10,109
)


7,592Income tax expense (benefit)


(14,592
)






200Net income (loss)


37,586



(10,109
)


7,392Non-cash deemed dividend related to beneficial conversion
    feature of Series B preferred stock










84Deemed dividend related to the redemption of Series B
    preferred stock










1,361Dividends on Series B preferred stock










671Allocation of undistributed earnings to Series A preferred
    stock


1,137







208Net income (loss) applicable to common shareholders

$
36,449


$
(10,109
)

$
5,068Net income (loss) per share applicable to common shareholdersBasic

$
0.53


$
(0.18
)

$
0.10Diluted

$
0.51


$
(0.18
)

$
0.10Shares used in computing net income (loss) per share applicable
    to common shareholdersBasic


69,131



56,732



52,477Diluted


70,915



56,732



53,323    57




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##### Table of Contents





QUESTCOR
    PHARMACEUTICALS, INC.



CONSOLIDATED STATEMENTS OF PREFERRED STOCK AND
    SHAREHOLDERS EQUITY AccumulatedPreferred Stock














Other


TotalSeries A


Series B


Common Stock


Deferred


Accumulated


Comprehensive


ShareholdersShares


Amount


Shares


Amount


Shares


Amount


Compensation


Deficit


Gain (Loss)


Equity(In thousands, except shares)Balances at January 1, 2005


2,155,715


$
5,081



8,400


$
7,578



51,216,488


$
88,436


$
(10
)

$
(84,423
)

$



$
11,581Stock compensation for options and warrants granted to
    consultants and employees






















29















29Deemed dividend on Series B preferred stock






















84







(84
)






Amortization of deferred compensation


























5











5Issuance of common stock pursuant to employee stock purchase plan


















347,023



151















151Issuance of common stock upon cashless exercise of warrant


















42,927



















Issuance of common stock dividend to Series B holders in
    lieu of cash dividend


















1,344,000



671







(671
)






Issuance of common stock upon exercise of stock options


















157,735



107















107Issuance of common stock upon conversion of Series B
    preferred stock










(1,275
)


(1,275
)


1,353,118



1,275















Deemed dividend related to the redemption of Series B
    preferred stock














1,538







(177
)






(1,361
)






Series B preferred stock redemption amount reclassified to
    current liability










(7,125
)


(7,841
)






















(7,841
)Comprehensive income (loss):Net unrealized loss on investments


































(2
)


(2
)Net income






























7,392







7,392Total comprehensive income






































7,390Balances at December 31, 2005


2,155,715



5,081











54,461,291



90,576



(5
)


(79,147
)


(2
)


11,422Stock compensation for equity incentives and restricted common
    stock granted to consultants and employees


















127,811



1,154















1,154Amortization of deferred compensation


























5











5Issuance of common stock pursuant to employee stock purchase plan


















513,571



348















348Issuance of common stock upon exercise of stock options


















572,191



521















521Issuance of common stock in stock offering, net of issuance costs


















11,400,000



12,741















12,741Issuance of common stock upon cashless exercise of warrants


















1,647,440



















Issuance of common stock upon exercise of warrants


















18,500



12















12Comprehensive income (loss):Net unrealized gain on investments


































3



3Net loss






























(10,109
)






(10,109
)Total comprehensive loss






































(10,106
)Balances at December 31, 2006


2,155,715



5,081











68,740,804



105,352







(89,256
)


1



16,097Stock compensation for equity incentives and restricted common
    stock granted to consultants and employees






















1,811















1,811Issuance of common stock pursuant to employee stock purchase plan


















401,025



263















263Issuance of common stock upon exercise of stock options


















821,510



833















833Issuance of common stock upon cashless exercise of warrants


















89,837



















Issuance of common stock upon exercise of warrants


















135,996



128















128Cancellation of unvested restricted stock


















(71,006
)


















Comprehensive income (loss):Net unrealized gain on investments


































53



53Net income






























37,586







37,586Total comprehensive income






































37,639Balances at December 31, 2007


2,155,715


$
5,081






$




70,118,166


$
108,387


$



$
(51,670
)

$
54


$
56,771    58




---



##### Table of Contents





QUESTCOR
    PHARMACEUTICALS, INC.
 CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Years Ended December 31,2007


2006


2005(In thousands)Cash Flows From Operating ActivitiesNet income (loss)

$
37,586


$
(10,109
)

$
7,392Adjustments to reconcile net income (loss) to net cash provided
    by (used in) operating activities:Share-based compensation expense


1,811



1,154



29Deferred income taxes


(15,922
)






Amortization of deemed discount on convertible debentures










108Amortization of investments


(387
)






Depreciation and amortization


498



316



995Gain on sale of product lines


(448
)






(9,642
)Loss on disposal of equipment


12







Other






5



13Changes in operating assets and liabilities:Accounts receivable


(21,856
)


(1,058
)


1,624Inventories


600



(1,388
)


(34
)Prepaid expenses and other current assets


33



(101
)


(418
)Accounts payable


(377
)


649



402Accrued compensation


926



310



(265
)Sales-related reserves


5,392



203



473Income taxes payable


1,330



(200
)


200Other accrued liabilities


971



(111
)


27Other non-current liabilities


(103
)


602



463Net cash provided by (used in) operating activities


10,066



(9,728
)


1,367Cash Flows From Investing ActivitiesAcquisition of purchased technology


(300
)


(4,086
)


(2,000
)Purchase of short-term investments


(27,995
)


(10,136
)


(6,141
)Proceeds from the sale and maturities of short-term investments


16,650



13,790



Purchase of property, equipment and leasehold improvements


(69
)


(205
)


(241
)Net proceeds from sale of product lines


448







24,794Proceeds from the sale of equipment










1Changes in deposits and other assets


(22
)


83



6Net cash provided by (used in) investing activities


(11,288
)


(554
)


16,419Cash Flows From Financing ActivitiesIssuance of common stock in stock offering, net






12,741



Issuance of common stock and warrants


1,224



881



258Short-term borrowings










191Redemption of Series B preferred stock






(7,841
)


Redemption of convertible debentures and repayment of note
    payable










(6,200
)Repayment of short-term debt and capital lease obligations










(326
)Net cash provided by (used in) financing activities


1,224



5,781



(6,077
)Increase (decrease) in cash and cash equivalents


2



(4,501
)


11,709Cash and cash equivalents at beginning of year


15,937



20,438



8,729Cash and cash equivalents at end of year

$
15,939


$
15,937


$
20,438Supplemental Disclosures of Cash Flow Information:Cash paid for interest

$



$



$
275Cash paid for income taxes

$



$
193


$
Non-Cash Investing and Financing Activities:Common stock issued in lieu of quarterly cash dividends on
    Series B preferred stock

$



$



$
671Common stock issued upon conversion of Series B preferred
    stock and accrued dividends for Series B preferred stock

$



$



$
1,275    59




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Organization
    and Summary of Significant Accounting Policies  Organization
    and Business Activity
  and/or
       60




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Use of
    Estimates
    Cash
    Equivalents and Short-Term Investments
  Available-for-sale
  Concentration
    of Risk
    December 31,% of Accounts Receivable

2007


2006CuraScript


97
%



%Wholesaler A



%


45
%Wholesaler B



%


26
%Wholesaler C



%


14
%Other customers


3
%


15
%100
%


100
%   61




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Years Ended December 31,% of Gross Product Sales

2007


2006


2005CuraScript


80
%



%



%Wholesaler A


7
%


36
%


35
%Wholesaler B


6
%


28
%


29
%Wholesaler C


3
%


27
%


23
%Other customers


4
%


9
%


13
%100
%


100
%


100
%     Inventories
  first-in, product-by-product
  Property
    and Equipment
    Useful Livesin YearsLaboratory equipment


5Manufacturing equipment


5-8Office equipment, furniture and fixtures


3-5Leasehold improvements


4-10   Intangible
    and Other Long-Lived Assets
    Impairment
    of Long-Lived Assets
   62




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Revenue
    Recognition
         63




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
           64




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2007


2006(In $000s)Product returns  credit memoranda policy

$
1,307


$
2,351Product returns  product replacement policy


31



Medicaid rebates


6,514



377Government chargebacks


222



56Other


102



$
8,176


$
2,784   Shipping
    and Handling Costs
    Research
    and Development
    Net
    Income (Loss) Per Share Applicable to Common
    Shareholders
  Earnings per Share 03-06, Participating Securities and the Two-Class Method Under
    SFAS 128 No. 03-06). No. 03-06
   65




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Years Ended December 31,2007


2006


2005Net income (loss) applicable to common shareholders

$
36,449


$
(10,109
)

$
5,068Shares used in computing net income (loss) per share applicable
    to common shareholders:Basic


69,131



56,732



52,477Effect of dilutive potential common shares:Stock options


1,660







830Warrants and placement agent unit options


118







16Restricted stock


6







Diluted


70,915



56,732



53,323Net income (loss) per share applicable to common shareholders:Basic

$
0.53


$
(0.18
)

$
0.10Diluted

$
0.51


$
(0.18
)

$
0.10         Share-Based
    Compensation
  Share-Based
    Payment
 66




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Transition Election Related to
    Accounting for Tax Effects of Share-Based Payment Awards
  Accounting for Stock Issued to Employees, Accounting
    for Stock-Based Compensation Accounting for Stock-Based
    Compensation-Transition and Disclosure
 67




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year EndedDecember 31,2005Net income applicable to common shareholders, as reported

$
5,068Add: Share-based employee compensation expense included in
    reported net income


5Deduct: Total share-based employee compensation expense
    determined under fair value method for all awards


(445
)Net income applicable to common shareholders, pro forma

$
4,628Basic and diluted net income per share applicable to common
    shareholders:As reported

$
0.10Pro forma

$
0.09     EITF 96-18, Accounting for Equity Instruments that are Issued to Other
    than Employees for Acquiring, or in conjunction with Selling
    Goods or Services,
  Income
    Taxes
    Accounting for Uncertainty in Income Taxes  an
    interpretation of FASB Statement No. 109
 68




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Comprehensive
    Income (Loss)
  Reporting Comprehensive Income
  Reclassifications
    Segment
    Information
      Years Ended December 31,2007


2006


2005Neurology

$
49,768


$
12,788


$
8,425Gastroenterology










5,084Nephrology










653$
49,768


$
12,788


$
14,162   Recently
    Issued Accounting Standards
  Business Combinations
  Noncontrolling Interests in Consolidated Financial
    Statements  an amendment of ARB No. 51
 69




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  No. 07-03, Accounting for Non-Refundable Advance Payments for Goods or
    Services to Be Used in Future Research and Development
    Activities No. 07-03). No. 07-03 No. 07-03 No. 07-03
  The
    Fair Value Option for Financial Assets and Financial Liabilities
  Fair Value Measurements
  2.
    Sale of
    Product Lines   70




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      3.
    Product
    Development  ® tm
  4.
    Product
    Acquisitions     71




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    5.
    Investments  available-for-sale,
  Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gain


(Loss)


Fair ValueDecember 31, 2007Cash equivalents:Money market funds

$
15,750


$



$



$
15,750Short-term investments:Commercial paper

$
11,916


$
55


$



$
11,971Corporate bonds


2,303







(1
)


2,302$
14,219


$
55


$
(1
)

$
14,273December 31, 2006Cash equivalents:Money market funds

$
15,423


$



$



$
15,423Short-term investments:Commercial paper

$
1,987


$
1


$



$
1,988Corporate bonds


500











500$
2,487


$
1


$



$
2,488   available-for-sale
  6.
    Inventories    December 31,2007


2006Raw materials

$
1,987


$
2,120Finished goods


387



1,082Less allowance for excess and obsolete inventories


(9
)


(237
)$
2,365


$
2,965  72




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  7.
    Property
    and Equipment    December 31,2007


2006Laboratory equipment

$
8


$
8Manufacturing equipment


648



602Office equipment, furniture and fixtures


1,085



1,085Leasehold improvements


408



4082,149



2,103Less accumulated depreciation and amortization


(1,627
)


(1,438
)$
522


$
665     8.
    Purchased
    Technology and Goodwill    December 31,2007


2006Purchased technology

$
4,386


$
4,086Less accumulated amortization


(419
)


(121
)$
3,967


$
3,965       December 31,2007


2006Goodwill

$
1,023


$
1,023Less accumulated amortization


(724
)


(724
)$
299


$
299   Goodwill and Other
    Intangible Assets
 73




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  9.
    Redemption
    of Convertible Debentures and Repayment of Note
    Payable      10.
    Indemnifications,
    Commitments and Contingencies  Indemnifications
    Employment
    Agreements
  and/or
  Leases
    AutomobileUnion City


Hayward





and Office


OperatingOffice


Office


Sublease


Equipment


LeasesYear Ending December 31,

Lease


Lease


Income


Leases


Total2008

$
569


$
808


$
(328
)

$
97


$
1,1462009


592



839



(376
)


22



1,0772010


616



870



(385
)


10



1,1112011


155



902



(397
)


1



6612012






816



(375
)






441Thereafter


















$
1,932


$
4,235


$
(1,861
)

$
130


$
4,436  74




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Accounting for a Loss on a Sublease, an
    interpretation of FASB 13 and APB Opinion No. 30 79-15, Accounting for the Loss on a Sublease Not Involving the
    Disposal of a Segment.
       75




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Contingencies
    Commitments
    11.
    Preferred
    Stock and Shareholders Equity  Preferred
    Stock
     76




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Classification and Measurement of
    Redeemable Securities
  ten-day
    Common
    Stock
   77




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  winding-up
      Warrants
    Outstanding
    Number





ExpirationExercise Price

Outstanding


Date Issued


Date$1.26


475,248



6/11/2003



6/11/2008   Equity
    Incentive Plans and Share-Based Compensation
    Expense
     78




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         79




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Years Ended December 31,2007


2006Cost of product sales

$
5


$
6Selling, general and administrative


1,488



965Research and development


322



56Total

$
1,815


$
1,027         Years Ended December 31,2007


2006


2005Expected volatility


82-86
%


90-98
%


60-69
%Weighted average volatility


85
%


94
%


64
%Risk-free interest rate


3.6-4.9
%


4.6-5.1
%


3.8-4.4
%Expected term (in years)


6.25



6.25



3.9-4.0Expected dividend yield


0



0



0    80




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Years Ended December 31,2007


2006


2005Expected volatility


65-151
%


70-98
%


63-64
%Weighted average volatility


133
%


81
%


63
%Risk-free interest rate


3.2-5.0
%


4.6-5.1
%


3.6-4.0
%Expected term (in years)


0.25-1.0



0.25-1.0



0.24-0.25Expected dividend yield


0



0



0         Weighted-Weighted-


AverageAverage


RemainingStock


Exercise


Contractual


AggregateOptions


Price


Term


Intrinsic Value(In years)


(In thousands)Outstanding at December 31, 2004


5,685,459


$
1.03Granted


4,144,000



0.54Exercised


(157,735
)


0.68Forfeited or expired


(3,269,650
)


0.95Outstanding at December 31, 2005


6,402,074


$
0.76Granted


3,080,750



1.23Exercised


(572,191
)


0.91Forfeited or expired


(731,318
)


1.47Outstanding at December 31, 2006


8,179,315


$
0.86



8.02


$
5,416Granted


2,379,250



1.09Exercised


(821,510
)


1.00Forfeited or expired


(4,134,630
)


0.90Outstanding at December 31, 2007


5,602,425


$
0.92



7.70


$
27,365Vested and exercisable at December 31, 2007


3,096,865


$
0.82



7.04


$
15,423    81




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Weighted-AverageRestricted


Grant Date FairStock


ValueNonvested shares at December 31, 2006


127,811


$
1.69Granted






Vested


(14,202
)


Forfeited or expired


(71,006
)


Nonvested shares at December 31, 2007


42,603


$
1.69     Reserved
    Shares
    December 31,2007Outstanding stock options


5,602,425Convertible preferred stock issued and outstanding (see
    Note 17)


2,155,715Common stock warrants


475,248Future grant under equity incentive award plans


4,439,783Future sale under the employee stock purchase plan (see
    Note 17)


862,99113,536,162  82




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  12.
    Income
    Taxes    Years Ended December 31,2007


2006


2005Current:Federal

$
590


$



$
175State


740







251,330







200Deferred:Federal


(14,129
)






State


(1,793
)






(15,922
)






Total income tax expense (benefit)

$
(14,592
)

$



$
200       December 31,2007


2006Deferred tax liabilities:Goodwill and purchased intangibles

$
105


$
100Deferred tax assets:Net operating loss carryforwards

$
14,358


$
37,200Research and development credits


1,387



1,500Sales-related reserves


3,381



1,300Acquired research and development


127



300Other, net


1,954



100Total deferred tax assets


21,207



40,400Valuation allowance


(5,180
)


(40,300
)Net deferred taxes

$
15,922


$
    83




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Years Ended December 31,2007


2006


2005Tax expense (benefit) at federal statutory rate


35.0
%


(34.0
)%


34.0
%State income taxes, net of federal benefit


2.1



(5.6
)


6.7Change in valuation allowances


(101.0
)


38.2



(38.0
)Other


0.4



1.4



0.0Provision for tax expense (benefit)


(63.5
)%



%


2.7
%        84




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##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Accounting for Income Taxes
    Unrecognized tax benefits at January 1, 2007

$
315Gross increases  tax positions in current period


Gross decreases  tax positions in current period


Unrecognized tax benefits at December 31, 2007

$
315     13.
    Related
    Party Transactions     85




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##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          14.
    Defined
    Contribution Plan   86




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##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  15.
    Comprehensive
    Income (Loss)    Years Ended December 31,2007


2006


2005Net income (loss)

$
37,586


$
(10,109
)

$
7,392Change in unrealized gains (losses) on available-for-sale
    securities


53



3



(2
)Comprehensive income (loss)

$
37,639


$
(10,106
)

$
7,390   16.
    Shareholder
    Rights Plan     87




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##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    17.
    Subsequent
    Events         88




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##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.FINANCIAL STATEMENT SCHEDULES
    (ITEM 15(a)(2))
 SCHEDULE II
    VALUATION AND QUALIFYING ACCOUNTS
  Years Ended December 31, 2007, 2006 and 2005
  Additions/Balance at


(Deductions)


Deductions


Balance atBeginning


Charged to


and


End ofof Period


Income


Write-Offs


Period(In thousands)Reserves for uncollectible accountsDecember 31, 2007

$
55


$
4


$
2


$
57December 31, 2006

$
84


$
16


$
45


$
55December 31, 2005

$
40


$
46


$
2


$
84Reserves for cash discountsDecember 31, 2007

$
32


$
227


$
256


$
3December 31, 2006

$
16


$
308


$
292


$
32December 31, 2005

$
42


$
352


$
378


$
16Reserves for obsolete and excess inventoriesDecember 31, 2007

$
237


$
307


$
535


$
9December 31, 2006

$
100


$
137


$



$
237December 31, 2005

$
107


$
42


$
49


$
100Reserves for sales and product return allowancesDecember 31, 2007

$
2,784


$
12,081


$
6,689


$
8,176December 31, 2006

$
2,581


$
2,767


$
2,564


$
2,784December 31, 2005

$
1,683


$
3,251


$
2,353


$
2,581    89




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber

Description1
.1(31)

Placement Agency Agreement dated December 7, 2006 by and between
    Questcor Pharmaceuticals, Inc. and BMO Capital Markets Corp.1
.2(31)

Form of Purchase Agreement.2
.1(1)

Merger agreement entered into August 4, 1999, by and among
    Cyprus Pharmaceutical Corporation, a California corporation
    (Parent), Cyprus Acquisition Corporation, a Delaware
    corporation and a wholly owned subsidiary of Parent, and
    RiboGene, Inc., a Delaware corporation.2
.2(27)

Assignment and Assumption Agreement by and between Questcor
    Pharmaceuticals, Inc. and Medpointe Inc., dated as of May 4,
    2006.3
.1(2)

Amended and Restated Articles of Incorporation of the Company.3
.2(25)

Certificate of Amendment to the Questcor Pharmaceuticals, Inc.
    Bylaws, dated as of March 2, 2006.3
.3(3)

Certificate of Determination of Series B Convertible Preferred
    Stock of the Company.3
.4(4)

Certificate of Determination of Series C Junior Participating
    Preferred Stock of the Company.3
.5(5)

Amended and Restated Bylaws of the Company, dated as of March 5,
    2008.4
.1(6)

Convertible Debenture between the Company and SF Capital
    Partners Ltd. dated March 15, 2002.4
.2(6)

Convertible Debenture between the Company and Defiante
    Farmaceutica Unipessoal Lda dated March 15, 2002.10
.1(7)

Forms of Incentive Stock Option and Non-statutory Stock Option.10
.2(8)

1992 Employee Stock Option Plan, as amended.10
.3(9)

1993 Non-employee Directors Equity Incentive Plan, as
    amended and related form of Nonstatutory Stock Option.10
.4(10)

2000 Employee Stock Purchase Plan.10
.5(11)

Asset Purchase Agreement dated July 27, 2001 between the Company
    and Aventis Pharmaceuticals Products, Inc.10
.6(11)

First Amendment to Asset Purchase Agreement dated January 29,
    2002, between the Company and Aventis Pharmaceuticals Products,
    Inc.10
.7(12)

Stock Purchase Agreement dated July 31, 2001 between Registrant
    and Sigma-Tau Finance Holding S.A.10
.8(13)

Warrant dated December 1, 2001 between the Company and Paolo
    Cavazza.10
.9(13)

Warrant dated December 1, 2001 between the Company and Claudio
    Cavazza.10
.10(6)

Securities Purchase Agreement between the Company and SF Capital
    Partners Ltd. dated March 15, 2002.10
.11(6)

Registration Rights Agreement between the Company and SF Capital
    Partners Ltd. dated March 15, 2002.10
.12(6)

Warrant between the Company and SF Capital Partners Ltd. dated
    March 15, 2002.10
.13(6)

Securities Purchase Agreement between the Company and Defiante
    Farmaceutica Unipessoal Lda dated March 15, 2002.10
.14(6)

Registration Rights Agreement between the Company and Defiante
    Farmaceutica Unipessoal Lda dated March 15, 2002.10
.15(6)

Warrant between the Company and Defiante Farmaceutica Unipessoal
    Lda dated March 15, 2002.10
.16(3)

Form of Common Stock Purchase Warrant dated January 15, 2003
    issued by the Company to purchasers of Series B Convertible
    Preferred Stock.10
.17(4)

Rights Agreement, dated as of February 11, 2003, between the
    Company and Computershare Trust Company, Inc.10
.18(3)

Form of Subscription Agreement dated as of December 29, 2002 by
    and between the Company and purchasers of Series B Convertible
    Preferred Stock and Common Stock Purchase Warrants.10
.19(14)

Letter Agreement dated September 2, 2003 between the Company and
    R. Jerald Beers.10
.20(14)

Amendment to Letter Agreement dated November 6, 2003 between the
    Company and R. Jerald Beers.10
.21(14)

Supply Agreement dated April 1, 2003 between the Company and
    BioVectra, dcl.




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##### Table of Contents



ExhibitNumber

Description10
.22(15)

Separation Agreement dated August 5, 2004 between the Company
    and Charles J. Casamento.10
.23(16)

Secured Promissory Note and Security Agreement dated July 31,
    2004 between the Company and Defiante Farmaceutica Lda.10
.24(17)

Letter Agreement between the Company and James L. Fares dated
    February 17, 2005.10
.25(18)

Amendment dated March 8, 2005 to the 8% Convertible
    Debenture dated March 15, 2002 issued by Questcor
    Pharmaceuticals, Inc. in favor of Defiante Farmaceutica Lda.10
.26(18)

Amendment dated March 10, 2005 to the 8% Convertible
    Debenture dated March 15, 2002 issued by Questcor
    Pharmaceuticals, Inc. in favor of SF Capital Partners Ltd.10
.27(19)

2004 Non-Employee Directors Equity Incentive Plan.10
.28(20)

Letter Agreement between the Company and Reinhard Koenig dated
    September 30, 2004.10
.29(20)

Letter Agreement between the Company and James L. Fares dated
    February 18, 2005.10
.30(20)

Letter Agreement between the Company and Steve Cartt dated March
    7, 2005.10
.31(20)

Letter Agreement between the Company and Steve Cartt dated March
    8, 2005.10
.32(20)

Letter Agreement between the Company and Reinhard Koenig dated
    February 3, 2004.10
.33(20)

Letter Agreement between the Company and Barbara J. McKee dated
    February 9, 2005.10
.34(20)

Separation Agreement and Release dated March 3, 2005 between the
    Company and R. Jerald Beers.10
.35(20)

Series B Preferred Shareholder Agreement and Waiver dated March
    29, 2005 by and between the Company and all of the holders of
    the outstanding shares of Series B Preferred Stock of the
    Company.10
.36(22)

First Amendment, dated as of September 9, 2005, to Rights
    Agreement dated as of February 11, 2003, between Questcor
    Pharmaceuticals, Inc. and Computershare Trust Company, Inc.10
.37(23)

Offer of Employment Letter Agreement between the Company and
    George Stuart dated September 27, 2005.10
.38(23)

Change-in-Control Letter Agreement between the Company and
    George Stuart dated September 28, 2005.10
.39(23)

Severance Letter Agreement between the Company and George Stuart
    dated September 28, 2005.10
.40(24)

Asset Purchase Agreement dated October 17, 2005 by and between
    Questcor Pharmaceuticals, Inc. and QOL Medical LLC.10
.41(26)

Offer of Employment Letter Agreement between the Company and
    Craig C. Chambliss dated March 31, 2005.10
.42(26)

Change-in-Control Letter Agreement between the Company and Craig
    C. Chambliss dated May 1, 2005.10
.43(26)

Severance Letter Agreement between the Company and Craig C.
    Chambliss dated May 4, 2005.10
.44(26)

Severance Letter Agreement between the Company and David
    Medeiros dated July 10, 2003.10
.45(28)

2006 Equity Incentive Award Plan.10
.46(29)

Form of Incentive Stock Option Agreement under the 2006 Equity
    Incentive Award Plan.10
.47(29)

Form of Non-Qualified Stock Option Agreement under the 2006
    Equity Incentive Award Plan.10
.48(29)

Form of Restricted Stock Award Agreement under the 2006 Equity
    Incentive Award Plan.10
.49(28)

2003 Employee Stock Purchase Plan, as amended.10
.50(30)

Offer of Employment Letter Agreement between the Company and
    Steven Halladay dated October 13, 2006.10
.51(30)

Change-in-Control Letter Agreement between the Company and
    Steven Halladay dated October 16, 2006.10
.52(30)

Severance Letter Agreement between the Company and Steven
    Halladay dated October 16, 2006.10
.53(30)

Offer of Employment Letter Agreement between the Company and
    Eric Liebler dated August 1, 2006.10
.54(30)

Amendment to Offer of Employment Letter Agreement between the
    Company and Eric Liebler dated October 13, 2006.10
.55(30)

Change-in-Control Letter Agreement between the Company and Eric
    Liebler dated August 1, 2006.




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##### Table of Contents



ExhibitNumber

Description10
.56(30)

Severance Letter Agreement between the Company and Eric Liebler
    dated August 1, 2006.10
.57(32)

Amended Change of Control Letter Agreement between the Company
    and James L. Fares dated February 13, 2007.10
.58(32)

Amended Change of Control Letter Agreement between the Company
    and Stephen L. Cartt dated February 13, 2007.10
.59(32)

Amended Change of Control Letter Agreement between the Company
    and Eric J. Liebler dated February 13, 2007.10
.60(32)

Amended Change of Control Letter Agreement between the Company
    and George M. Stuart dated February 13, 2007.10
.61(32)

Amended Change of Control Letter Agreement between the Company
    and Craig C. Chambliss dated February 13, 2007.10
.62(32)

Amended Change of Control Letter Agreement between the Company
    and Steven Halladay dated February 13, 2007.10
.63(32)

Change of Control Letter Agreement between the Company and David
    J. Medeiros dated February 13, 2007.10
.64(33)

Termination Agreement and General Release related to James L.
    Fares departure as Chief Executive Officer of the Company
    dated June 20, 2007.10
.65(34)

Form of Performance-Based Vesting Stock Option Agreement under
    the 2006 Equity Incentive Award Plan.10
.66(35)

Severance Agreement between the Company and David J. Medeiros
    dated July 16, 2007.10
.67(36)

Separation Agreement and General Release related to Eric J.
    Lieblers resignation as Senior Vice President, Strategic
    Planning and Communications of the Company dated August 3, 2007.10
.68(37)

Form of Option Agreement for Director Options.10
.69(37)

Form of Option Agreement for Committee Options.16
.1(21)

Letter to the Security and Exchange Commission from Ernst &
    Young LLP.23
.1*

Consent of Odenburg, Ullakko, Muranishi & Co. LLP,
    Independent Registered Public Accounting Firm.31*


Certification pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.32*


Certification pursuant to Section 906 of the Public Company
    Accounting Reform and Investor Act of 2002.     *
    
    Filed herewith.(1)
    
    Filed as an exhibit to the Companys Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 1999, and
    incorporated herein by reference.(2)
    
    Filed as an exhibit to the Companys Registration Statement
    on
    Form S-8,
    Registration Statement
    No. 333-30558,
    filed on February 16, 2000, and incorporated herein by
    reference.(3)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on January 16, 2003, and incorporated herein by
    reference.(4)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on February 14, 2003, and incorporated herein by
    reference.(5)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    on March 5, 2008, and incorporated herein by reference.(6)
    
    Filed as an exhibit to the Companys Registration Statement
    on
    Form S-3,
    Registration
    No. 333-85160,
    filed on March 28, 2002, and incorporated herein by
    reference.(7)
    
    Filed as an exhibit to the Companys Registration Statement
    on
    Form S-1,
    Registration
    No. 33-51682,
    and incorporated herein by reference.(8)
    
    Filed as an exhibit to the Companys Proxy Statement for
    the 2002 Annual Meeting of Shareholders, filed on March 28,
    2002, and incorporated herein by reference.




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##### Table of Contents



(9)
    
    Filed as an exhibit to the Companys Registration Statement
    Form S-4,
    Registration Statement
    No. 333-87611,
    filed on September 23, 1999, and incorporated herein by
    reference.(10)
    
    Filed as an exhibit to the Companys Registration Statement
    on
    Form S-8,
    Registration Statement
    No. 333-46990,
    filed on September 29, 2000, and incorporated herein by
    reference.(11)
    
    Filed as an exhibit to the Companys Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2002, and incorporated
    herein by reference.(12)
    
    Filed as an exhibit to the Companys Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2001, and incorporated
    herein by reference.(13)
    
    Filed as an exhibit to the Companys Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2001, and
    incorporated herein by reference.(14)
    
    Filed as an exhibit to the Companys Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2003, and
    incorporated herein by reference.(15)
    
    Filed as an exhibit to the Companys Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2004, and incorporated
    herein by reference.(16)
    
    Filed as an exhibit to the Companys Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2004, and incorporated
    herein by reference.(17)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on February 23, 2005, and incorporated herein by
    reference.(18)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on March 14, 2005, and incorporated herein by
    reference.(19)
    
    Filed as an exhibit to the Companys Proxy Statement for
    the 2004 Annual Meeting of Stockholders, filed on March 29,
    2004, and incorporated herein by reference.(20)
    
    Filed as an exhibit to the Companys Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2004, and
    incorporated herein by reference.(21)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on April 11, 2005, and incorporated herein by
    reference.(22)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on September 13, 2005, and incorporated herein by
    reference.(23)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on September 30, 2005, and incorporated herein by
    reference.(24)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on October 19, 2005, and incorporated herein by
    reference.(25)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on March 2, 2006, and incorporated herein by
    reference.(26)
    
    Filed as an exhibit to the Companys Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2005, and
    incorporated herein by reference.(27)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on May 10, 2006, and incorporated herein by reference.(28)
    
    Filed as an exhibit to the Companys Proxy Statement for
    the 2006 Annual Meeting of Shareholders, filed on April 10,
    2006, and incorporated herein by reference.(29)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on May 24, 2006, and incorporated herein by reference.(30)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on October 18, 2006, and incorporated herein by
    reference.(31)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on December 8, 2006, and incorporated herein by
    reference.(32)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on February 15, 2007, and incorporated herein by
    reference.




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##### Table of Contents



(33)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on June 22, 2007, and incorporated herein by
    reference.(34)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on July 3, 2007, and incorporated herein by reference.(35)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on July 20, 2007, and incorporated herein by
    reference.(36)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on August 6, 2007, and incorporated herein by
    reference.(37)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on January 4, 2008, and incorporated herein by
    reference.
    
    The Company has requested confidential treatment with respect to
    portions of this exhibit.