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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, 2008Oro

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
    Union City, California(Address of principal
    executive offices)

94587(Zip Code)   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

Nasdaq Global Market   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. o
  Rule 12b-2
  o Large
    accelerated filer

þ Accelerated
    filer

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

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




---



##### 





ANNUAL
    REPORT ON
    FORM 10-K
    FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008
  
  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


22Item 7.

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


24Item 7A.

Quantitative and Qualitative Disclosures about
    Market Risk


47Item 8.

Financial Statements and Supplementary Data


49Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


49Item 9A.

Controls and Procedures


49Item 9B.

Other Information


50PART IIIItem 10.

Directors and Executive Officers of the
    Registrant


50Item 11.

Executive Compensation


51Item 12.

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


51Item 13.

Certain Relationships and Related Transactions,
    and Director Independence


52Item 14.

Principal Accountant Fees and Services


52PART IVItem 15.

Exhibits and Financial Statement Schedules


52Signatures


56EX-10.74EX-10.75EX-10.76EX-10.77EX-10.78EX-23.1EX-31EX-32   2




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




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4




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® ®
  (510) 400-0700. http://www.questcor.com.
  H.P.
    Acthar Gel
        Risk Factors: We are aware of several competitors
    attempting to develop and market products that treat IS,which may reduce or liminate our commercial
    opportunity
   5




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Doral
  and/or
  Product
    Development
  ® tm
      Manufacturing
       6




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Divested
    Product Lines
      Sales and
    Marketing
    Beacon
    Pharmaceuticals, Ltd.
    IDIS
    Limited
   7




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Competition
            Risk Factors: We are aware of several competitors
    attempting to develop and market products that treat IS,which may reduce or liminate our commercial
    opportunity
  Government
    Regulation
  Marketed
    Pharmaceutical Products
       8




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Risk Factors: We are currently
    subject to numerous governmental regulations and it can be
    costly to comply with these regulations and to develop compliant
    products and processes
  Drugs
    in Development
    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
 9




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##### Table of Contents



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
      Website
    Address
  http://www.questcor.com. Form 10-K, Form 10-Q, Form 8-K,
  Financial
    Information
   10




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Item 1A.
    Risk
    Factors  Risks
    Associated with our Current Business
  Substantially
    all of our revenue and profits are derived from
    Acthar.
        We
    cannot predict whether the FDA will approve our sNDA for
    Acthar.
      We are
    aware of several competitors attempting to develop and market
    products that treat IS, which may reduce or eliminate our
    commercial opportunity.
     11




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We may
    be negatively affected by lower reimbursement
    levels.
      Medicaid
    eligible patients and government entities may account for a
    greater proportion of our Acthar unit sales resulting in reduced
    net sales.
   12




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Federal
    and/or state health care reform initiatives could negatively
    affect our business.
      The
    current economic environment may impact our
    business.
       13




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We
    have a history of operating losses and have only recently
    generated sufficient revenue to achieve
    profitability.
    Risks
    Associated with our Growth Initiatives
  Our
    strategy to generate Acthar revenue from other therapeutic areas
    might not be successful.
    We
    have a very limited pipeline of new products.
    Other
    Risks Associated with our Business
  The
    loss of our key management personnel could have an adverse
    impact on future operations.
   14




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We are
    currently 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. 15




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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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We may
    not be able to fully utilize the benefit of our net operating
    loss and tax credit carryforwards.
    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.
    Business
    interruptions could limit our ability to operate our
    business.
  back-up
 17




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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.
    We
    have certain anti-takeover provisions in place.
      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, 2008

$
9.54


$
6.32September 30, 2008


7.35



4.41June 30, 2008


5.26



4.20March 31, 2008


6.07



3.79December 31, 2007


6.15



0.75September 30, 2007


0.63



0.35June 30, 2007


1.08



0.44March 31, 2007


1.54



0.80      19




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Stock
    Repurchases
  Form 10-K
  Dividends
    Equity
    Compensation Plans
   20




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Stock
    Performance Graph
    Comparison
    of 5 Year Cumulative Total Return*
     
  Cumulative Total Return*12/03

12/04

12/05

12/06

12/07

12/08QUESTCOR PHARMACEUTICALS, INC.


100.00



71.62



140.55



200.00



779.73



1,258.11AMEX COMPOSITE INDEX


100.00



124.13



155.00



184.30



217.52



132.72NASDAQ PHARMACEUTICAL INDEX


100.00



110.22



111.87



114.89



106.37



97.32   *
    
    $100 invested on 12/31/03 in stock or index-including
    reinvestment of dividends. Fiscal year ended December 31.   21




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Item 6.
    Selected
    Consolidated Financial Data    Years Ended December 31,2008(1)


2007(1)


2006


2005


2004(In thousands, except per share data)Consolidated Statement of Operations Data:Net sales

$
95,248


$
49,768


$
12,788


$
14,162


$
18,404Total operating expenses


30,364



22,918



20,631



13,241



14,940Income (loss) from operations


57,580



21,555



(10,843
)


(2,189
)


(266
)Gain on sale of product lines


75



448







9,642



Income tax expense (benefit)(2)


18,198



(14,592
)






200



Net income (loss)


40,532



37,586



(10,109
)


7,392



(832
)Net income (loss) applicable to common shareholders


35,265



36,449



(10,109
)


5,068



(1,508
)Net income (loss) per share applicable to common shareholders:Basic

$
0.52


$
0.53


$
(0.18
)

$
0.10


$
(0.03
)Diluted

$
0.49


$
0.51


$
(0.18
)

$
0.10


$
(0.03
)Shares used in computing net income (loss) per share applicable
    to common shareholders:Basic


67,761



69,131



56,732



52,477



50,844Diluted


71,350



70,915



56,732



53,323



50,844   December 31,2008(1)


2007(1)


2006


2005


2004(In thousands)Consolidated Balance Sheet Data:Cash, cash equivalents and short-term investments

$
55,451


$
30,212


$
18,425


$
26,577


$
8,729Working capital


59,272



57,153



17,506



16,121



5,082Total assets


89,146



78,448



29,635



31,348



28,173Long-term debt


















1,986Preferred stock, Series A(3)






5,081



5,081



5,081



5,081Preferred stock, Series B(4)














7,841



7,578Common stock


84,028



108,387



105,352



90,576



88,436Accumulated deficit


(16,405
)


(51,670
)


(89,256
)


(79,147
)


(84,423
)Total shareholders equity


67,892



56,771



16,097



11,422



11,581     (1)
    
    In August 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 years ended December 31,
    2008 and 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 valuation allowance
    established against deferred tax assets available to reduce the
    tax obligations on our 2008 taxable income. In 2008, we reversed
    the remaining $5.2 million valuation allowance on deferred
    tax assets that 22




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we believe will be recovered based on anticipated taxable income
    in 2009 and future years, and the corresponding tax benefit
    reduced our income tax expense.(3)
    
    The Series A Preferred Stock was repurchased in February
    2008 for $10.3 million. Please refer to
    Note 10  Preferred Stock and
    Shareholders Equityin 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 Ended12/31/08


09/30/08


06/30/08


03/31/08(In thousands, except per share data)Net sales

$
27,018


$
24,200


$
24,898


$
19,132Cost of sales


1,858



1,937



2,190



1,319Income tax expense(3)


1,530



6,555



5,625



4,488Net income


16,242



8,955



8,794



6,541Net income applicable to common shareholders


16,242



8,955



8,794



1,274Net income per share applicable to common shareholders:Basic

$
0.25


$
0.13


$
0.13


$
0.02Diluted

$
0.24


$
0.13


$
0.12


$
0.02   Quarter Ended12/31/07(1)


09/30/07(1)


06/30/07


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

$
27,114


$
14,809


$
4,144


$
3,701Cost of 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
)     (1)
    
    In August 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.(3)
    
    During the quarter ended June 30, 2008, we recorded a
    $750,000 income tax benefit resulting from the reversal of the
    valuation allowance related to deferred tax assets that we
    believe will be recovered based on anticipated taxable income
    for 2009. During the quarter ended December 31, 2008, we
    reversed the remaining $4.4 million valuation allowance
    related to deferred tax assets that we believe will be recovered
    based on anticipated taxable income for 2010 and future years.
    The tax benefits resulting from the reversal of the valuation
    allowance reduced our income tax expense in the quarters ended
    June 30, 2008 and December 31, 2008. 23




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Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations      Overview
  and/or
   24




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Critical
    Accounting Policies and Use of Estimates
   25




---



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Sales
    Reserves
      Product
    Returns
     26




---



##### Table of Contents



2008


2007


2006(In $000s)Balance at January 1

$
1,307


$
2,351


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


(1,261
)


(1,571
)


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






(86
)


Current provision related to sales made in prior years


161



(86
)


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


11



699



1,671Balance at December 31

$
218


$
1,307


$
2,351     Medicaid
    Rebates
         27




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##### Table of Contents



2008


2007


2006(In $000s)Balance at January 1

$
6,514


$
377


$
432Actual Medicaid payments for sales made in prior year


(7,274
)


(391
)


(231
)Actual Medicaid payments for sales made in current year


(22,074
)


(1,500
)


(713
)Current Medicaid provision for sales made in prior year


760



14



(201
)Current Medicaid provision for sales made in current year


33,480



8,014



1,090Balance at December 31

$
11,406


$
6,514


$
377     Government
    Chargebacks
   28




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##### Table of Contents



2008


2007


2006(In $000s)Balance at January 1

$
222


$
56


$
32Actual chargeback payments for sales made in prior year


(222
)


(56
)


(32
)Actual chargeback payments for sales made in current year


(3,231
)


(2,997
)


(270
)Current chargeback provision for sales made in prior year










Current chargeback provision for sales made in current year


3,395



3,219



326Balance at December 31

$
164


$
222


$
56     Other
      December 31,2008


2007(In $000s)Medicaid rebates

$
11,406


$
6,514Government chargebacks


164



222Product returns  credit memoranda policy


218



1,307Product returns  product replacement policy


37



31Other






102$
11,825


$
8,176   Inventories
   29




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##### Table of Contents



Intangible
    and Long-Lived Assets
  Goodwill and Other
    Intangible Assets Accounting for the Impairment or
    Disposal of Long-Lived Assets
  Share-Based
    Compensation
  Share-Based Payment Share-Based Payment
     30




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Lease
    Termination Liability
    Accounting for a Loss on a Sublease, an interpretation of
    FASB 13 and APB Opinion No. 30 Bulletin 79-15, Accounting for the Loss on a Sublease Not Involving the
    Disposal of a Segment.
    Income
    Taxes
     31




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##### Table of Contents



Results
    of Operations
  Year
    ended December 31, 2008 compared to year ended
    December 31, 2007:
  Total
    Net Sales
  Years EndedDecember 31,





%2008


2007


Increase


Change(In $000s)Net sales

$
95,248


$
49,768


$
45,480



91
%    32




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##### Table of Contents



Cost
    of Sales and Gross Profit
  Years EndedDecember 31,





%2008


2007


Increase


Change(In $000s)Cost of sales

$
7,304


$
5,295


$
2,009



38
%Gross profit

$
87,944


$
44,473


$
43,471



98
%Gross margin


92
%


89
%  33




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##### Table of Contents



Selling,
    General and Administrative
  Years EndedDecember 31,





%2008


2007


Increase


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

$
19,247


$
17,662


$
1,585



9
%     12-month 12-month
     34




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##### Table of Contents



Research
    and Development
  Years EndedDecember 31,





%2008


2007


Increase


Change(In $000s)Research and development

$
10,614


$
4,758


$
5,856



123
%     Depreciation
    and Amortization
  Years EndedDecember 31,





%2008


2007


Increase


Change(In $000s)Depreciation and amortization

$
503


$
498


$
5



1
%    35




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##### Table of Contents



Other
    Income, net
  Years EndedDecember 31,





%2008


2007


(Decrease)


Change(In $000s)Other income, net

$
1,150


$
1,439


$
(289
)


(20
)%     Income
    Before Income Taxes and Income Tax Expense
    (Benefit)
  Years EndedDecember 31,





%2008


2007


Increase


Change(in $000s)Income before income taxes

$
58,730


$
22,994


$
35,736



155
%Income tax expense (benefit)

$
18,198


$
(14,592
)

$
32,790



225
%          36




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##### Table of Contents



Net
    Income
  Years EndedDecember 31,





%2008


2007


Increase


Change(In $000s)Net income

$
40,532


$
37,586


$
2,946



8
%     Series A
    Preferred Stock Dividend and Distribution
  Years EndedDecember 31,


Increase/


%2008


2007


(Decrease)


Change(in $000s)Deemed dividend on Series A Preferred Stock

$
5,267


$



$
5,267




%Allocation of undistributed earnings to Series A Preferred
    Stock

$



$
1,137


$
(1,137
)


(100
)%       Net
    Income Applicable to Common Shareholders
  Years EndedDecember 31,





%2008


2007


Decrease


Change(in $000s)Net income applicable to common shareholders

$
35,265


$
36,449


$
(1,184
)


(3
)%    37




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##### Table of Contents



Year
    ended December 31, 2007 compared to year ended
    December 31, 2006:
  Total
    Net Sales
  Years EndedDecember 31,





%2007


2006


Increase


Change(In $000s)Net sales

$
49,768


$
12,788


$
36,980



289
%              38




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##### Table of Contents



Cost
    of Sales and Gross Profit
  Years EndedDecember 31,





%2007


2006


Increase


Change(In $000s)Cost of sales

$
5,295


$
3,000


$
2,295



77
%Gross profit

$
44,473


$
9,788


$
34,685



354
%Gross margin


89
%


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
%       Research
    and Development
  Years EndedDecember 31,





%2007


2006


Increase


Change(In $000s)Research and development

$
4,758


$
3,033


$
1,725



57
%    39




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##### Table of Contents



Depreciation
    and Amortization
  Years EndedDecember 31,





%2007


2006


Increase


Change(In $000s)Depreciation and amortization

$
498


$
316


$
182



58
%     Other
    Income, net
  Years EndedDecember 31,





%2007


2006


Increase


Change(In $000s)Other income, net

$
1,439


$
734


$
705



96
%     Income
    Before Income Taxes and Income Tax Expense
    (Benefit)
  Years EndedDecember 31,





%2007


2006


Increase


Change(in $000s)Income (loss) before income taxes

$
22,994


$
(10,109
)

$
33,103



327
%Income tax expense (benefit)

$
(14,592
)

$



$
14,592




%    40




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##### Table of Contents



Net
    Income (Loss)
  Years EndedDecember 31,





%2007


2006


Increase


Change(In $000s)Net income

$
37,586


$
(10,109
)

$
47,695



472
%     Allocation
    of Undistributed Earnings to Series A Preferred
    Stock
  Years EndedDecember 31,





%2007


2006


Increase


Change(in $000s)Allocation of undistributed earnings to Series A Preferred
    Stock

$
1,137


$



$
1,137




%    41




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##### Table of Contents



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





%2007


2006


Increase


Change(in $000s)Net income (loss) applicable to common shareholders

$
36,449


$
(10,109
)

$
46,558



461
%     Liquidity
    and Capital Resources
          Years Ended December 31,Liquidity and Capital Resources

2008


2007


2006(In $000s)Cash, cash equivalents and short-term investments

$
55,451


$
30,212


$
18,425Accounts receivable, net


10,418



23,639



1,783Working capital


59,272



57,153



17,506Cash provided by/(used in):Operating activities


63,509



10,066



(9,728
)Investing activities


(27,249
)


(11,288
)


(554
)Financing activities


(38,917
)


1,224



5,781    42




---



##### Table of Contents



Operating
    Cash Flows
        Investing
    Cash Flows
       43




---



##### Table of Contents



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





3 to 5


After 5Total


or Less


1 to 3 Years


Years


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

$
5,146


$
1,595


$
2,730


$
821


$
Purchase orders and obligations(2)


300



150



150







Total contractual cash obligations

$
5,446


$
1,745


$
2,880


$
821


$
     (1)
    
    As of December 31, 2008 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, 2008 was approximately $705,000. 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 2009 for this
    facility are $592,000. 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 $376,000 in 2009 as sublease
    income to be used to pay a portion of our 2009 Hayward facility
    annual rent expense of $839,000.(2)
    
    Represents our obligations as of December 31, 2008 for
    which the goods have not yet been received or the services have
    not yet been rendered. The amount relates to an agreement with
    BioVectra dcl dated January 22, 2008. 44




---



##### Table of Contents



Additional
    Payments
    ® tm
  Indemnifications
    Employment
    Agreements
  and/or
  Equity
    Transactions
       45




---



##### Table of Contents



Cash
    Requirements
      Recently
    Issued Accounting Standards
  FAS 157-3, Determining the Fair Value of a Financial Asset When the
    Market for That Asset Is Not Active FAS 157-3). FAS 157-3 FAS 157-3
 46




---



##### Table of Contents



FAS 157-3 FAS 157-3
  FAS 157-2, Effective Date of FASB Statement No. 157 FAS 157-2), FAS 157-2. FAS 157-2
  Business Combinations
  No. 07-1, Accounting for Collaborative Arrangements Related to the
    Development and Commercialization of Intellectual Property (EITF 07-1). EITF 07-1 EITF 07-1
  Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk  Market
    Rate Risk
   47




---



##### Table of Contents



Fair ValueDecember 31,2008


2008(In thousands, except interest rates)Cash, cash equivalents and short-term investments

$
55,451


$
55,451Average interest rate


2.43
%


   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
%


  48




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##### Table of Contents



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


57Audited Financial StatementsConsolidated Balance Sheets


59Consolidated Statements of Operations


60Consolidated Statements of Preferred Stock and
    Shareholders Equity


61Consolidated Statements of Cash Flows


62Notes to Consolidated Financial Statements


63Financial Statement Schedules


90   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
       49




---



##### Table of Contents



Internal Control-Integrated Framework Form 10-K,
    Item 9B.
    Other
    Information   PART III  Item 10.
    Directors
    and Executive Officers of the Registrant         50




---



##### Table of Contents



Item 11.
    Executive
    Compensation    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


5,092,552


$
2.34



3,309,911Equity compensation plans not approved by shareholders


N/A



N/A



N/ATotal


5,092,552


$
2.34



3,309,911  51




---



##### Table of Contents



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.
  PageReports of Independent Registered Public Accounting Firm


57Consolidated Balance Sheets


59Consolidated Statements of Operations


60Consolidated Statements of Preferred Stock and
    Shareholders Equity


61Consolidated Statements of Cash Flows


62Notes to Financial Statements


63   Financial Statement Schedules.
  Exhibits
  ExhibitNumber

Description2
.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(21)

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
.4(3)

Certificate of Determination of Series C Junior
    Participating Preferred Stock of the Company.3
.5(4)

Amended and Restated Bylaws of the Company, dated as of
    March 5, 2008.4
.2(5)

Convertible Debenture between the Company and Defiante
    Farmaceutica Unipessoal Lda dated March 15, 2002.10
.1(6)

Forms of Incentive Stock Option and Non-statutory Stock Option.10
.2(7)

1992 Employee Stock Option Plan, as amended.**10
.3(8)

1993 Non-employee Directors Equity Incentive Plan, as
    amended and related form of Nonstatutory Stock Option.**10
.5(9)

Asset Purchase Agreement dated July 27, 2001 between the
    Company and Aventis Pharmaceuticals Products, Inc. 52




---



##### Table of Contents



ExhibitNumber

Description10
.6(9)

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

Stock Purchase Agreement dated July 31, 2001 between
    Registrant and Sigma-Tau Finance Holding S.A.10
.8(11)

Warrant dated December 1, 2001 between the Company and
    Paolo Cavazza.10
.9(11)

Warrant dated December 1, 2001 between the Company and
    Claudio Cavazza.10
.13(5)

Securities Purchase Agreement between the Company and Defiante
    Farmaceutica Unipessoal Lda dated March 15, 2002.10
.14(5)

Registration Rights Agreement between the Company and Defiante
    Farmaceutica Unipessoal Lda dated March 15, 2002.10
.15(5)

Warrant between the Company and Defiante Farmaceutica Unipessoal
    Lda dated March 15, 2002.10
.17(3)

Rights Agreement, dated as of February 11, 2003, between
    the Company and Computershare Trust Company, Inc.10
.21(12)

Supply Agreement dated April 1, 2003 between the Company
    and BioVectra, dcl.10
.23(13)

Secured Promissory Note and Security Agreement dated
    July 31, 2004 between the Company and Defiante Farmaceutica
    Lda.10
.25(14)

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
.27(15)

2004 Non-Employee Directors Equity Incentive Plan.**10
.30(16)

Letter Agreement between the Company and Steve Cartt dated
    March 7, 2005.**10
.31(16)

Letter Agreement between the Company and Steve Cartt dated
    March 8, 2005.**10
.36(17)

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(18)

Offer of Employment Letter Agreement between the Company and
    George Stuart dated September 27, 2005.**10
.38(18)

Change-in-Control
    Letter Agreement between the Company and George Stuart dated
    September 28, 2005.**10
.39(18)

Severance Letter Agreement between the Company and George Stuart
    dated September 28, 2005.**10
.40(19)

Asset Purchase Agreement dated October 17, 2005 by and
    between Questcor Pharmaceuticals, Inc. and QOL Medical LLC.10
.44(20)

Severance Letter Agreement between the Company and David
    Medeiros dated July 10, 2003.**10
.45(22)

2006 Equity Incentive Award Plan.**10
.46(23)

Form of Incentive Stock Option Agreement under the 2006 Equity
    Incentive Award Plan.10
.47(23)

Form of Non-Qualified Stock Option Agreement under the 2006
    Equity Incentive Award Plan.10
.48(23)

Form of Restricted Stock Award Agreement under the 2006 Equity
    Incentive Award Plan.10
.50(24)

Offer of Employment Letter Agreement between the Company and
    Steven Halladay dated October 13, 2006.**10
.51(24)

Change-in-Control
    Letter Agreement between the Company and Steven Halladay dated
    October 16, 2006.**10
.52(24)

Severance Letter Agreement between the Company and Steven
    Halladay dated October 16, 2006.**10
.58(25)

Amended Change of Control Letter Agreement between the Company
    and Stephen L. Cartt dated February 13, 2007.**10
.60(25)

Amended Change of Control Letter Agreement between the Company
    and George M. Stuart dated February 13, 2007.**10
.62(25)

Amended Change of Control Letter Agreement between the Company
    and Steven Halladay dated February 13, 2007.** 53




---



##### Table of Contents



ExhibitNumber

Description10
.63(25)

Change of Control Letter Agreement between the Company and David
    J. Medeiros dated February 13, 2007.**10
.65(26)

Form of Performance-Based Vesting Stock Option Agreement under
    the 2006 Equity Incentive Award Plan.10
.66(27)

Severance Agreement between the Company and David J. Medeiros
    dated July 16, 2007.**10
.68(28)

Form of Option Agreement for Director Options.10
.69(28)

Form of Option Agreement for Committee Options.10
.70(29)

Amended and Restated 2003 Employee Stock Purchase Plan.**10
.71(30)

Transition Agreement between the Company and George M. Stuart
    dated July 31, 2008.**10
.72(31)

Stock Purchase Agreement, by and between the Company and
    Chaumiere Consultadoria & Servicos SDC Unipessoal
    L.D.A., dated August 13, 2008.10
.73(32)

Stock Purchase Agreement, by and between the Company and
    Inverlochy Consultadoria & Servicos L.D.A., dated
    September 3, 2008.10
.74*

Redemption Agreement, by and between the Company and Shire
    Pharmaceuticals, Inc., dated February 19, 2008.10
.75*

Severance Letter Agreement between the Company and Gary M. Sawka
    dated September 10, 2008.**10
.76*

Offer of Employment Letter Agreement between the Company and
    Gary M. Sawka dated September 9, 2008.**10
.77*

Amended and Restated Employment Agreement between the Company
    and Don Bailey dated December 19, 2008.**10
.78*

Form of 409A Letter Amendment to Officers Severance,
    Change in Control and Employment Agreements.**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.**
    
    This exhibit is identified as a management contract or
    compensatory plan or arrangement pursuant to Item 15(a)(3)
    of
    Form 10-K.(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 Current Report on
    Form 8-K
    on March 27, 2008, and incorporated herein by reference.(3)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on February 14, 2003, and incorporated herein by
    reference.(4)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    on March 5, 2008, and incorporated herein by reference.(5)
    
    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.(6)
    
    Filed as an exhibit to the Companys Registration Statement
    on
    Form S-1,
    Registration
    No. 33-51682,
    and incorporated herein by reference.(7)
    
    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.(8)
    
    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. 54




---



##### Table of Contents



(9)
    
    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.(10)
    
    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.(11)
    
    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.(12)
    
    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.(13)
    
    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.(14)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on March 14, 2005, and incorporated herein by
    reference.(15)
    
    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.(16)
    
    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.(17)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on September 13, 2005, and incorporated herein by
    reference.(18)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on September 30, 2005, and incorporated herein by
    reference.(19)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on October 19, 2005, 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, 2005, and
    incorporated herein by reference.(21)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on May 10, 2006, and incorporated herein by reference.(22)
    
    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.(23)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on May 24, 2006, and incorporated herein by reference.(24)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on October 18, 2006, and incorporated herein by
    reference.(25)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on February 15, 2007, and incorporated herein by
    reference.(26)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on July 3, 2007, and incorporated herein by reference.(27)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on July 20, 2007, and incorporated herein by
    reference.(28)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on January 4, 2008, and incorporated herein by
    reference.(29)
    
    Filed as an exhibit to the Companys Definitive Proxy on
    Schedule 14A filed on April 21, 2008, and incorporated
    herein by reference.(30)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on August 5, 2008, and incorporated herein by
    reference.(31)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on August 19, 2008, and incorporated herein by
    reference. 55




---



##### Table of Contents



(32)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on September 9, 2008, and incorporated herein by
    reference.
    
    The Company has requested confidential treatment with respect to
    portions of this exhibit. 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 16, 2009/s/  GARY
    SAWKAGary
    Sawka

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

March 16, 2009/s/  VIRGIL
    D. THOMPSONVirgil
    D. Thompson

Chairman

March 16, 2009/s/  NEAL
    C. BRADSHERNeal
    C. Bradsher

Director

March 16, 2009/s/  STEPHEN
    C. FARRELLStephen
    C. Farrell

Director

March 16, 2009/s/  DAVID
    YOUNGDavid
    Young

Director

March 16, 2009  56




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM           Fair Value Measurements Accounting for Uncertainty in
    Income Taxes, an Interpretation of FAS 109
  Internal Control 
    Integrated Framework
       57




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
     Internal Control 
    Integrated Framework
                 58




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.



CONSOLIDATED
    BALANCE SHEETS  December 31,2008


2007(In thousands, except share amounts)ASSETSCurrent assets:Cash and cash equivalents

$
13,282


$
15,939Short-term investments


42,169



14,273Total cash, cash equivalents and short-term investments


55,451



30,212Accounts receivable, net of allowance for doubtful accounts of
    $62 and $57 at December 31, 2008 and 2007, respectively


10,418



23,639Inventories, net


2,459



2,365Prepaid income taxes


3,316



Prepaid expenses and other current assets


1,101



778Deferred tax assets


6,252



14,879Total current assets


78,997



71,873Property and equipment, net


450



522Purchased technology, net


3,669



3,967Goodwill


299



299Deposits and other assets


710



744Deferred tax assets


5,021



1,043Total assets

$
89,146


$
78,448LIABILITIES, PREFERRED STOCK AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable

$
4,302


$
1,777Accrued compensation


1,896



1,945Sales-related reserves


11,825



8,176Income taxes payable






1,330Other accrued liabilities


1,702



1,492Total current liabilities


19,725



14,720Lease termination and deferred rent liabilities


1,500



1,869Other non-current liabilities


29



7Commitments and contingencies (see Note 9)Preferred stock, no par value, 7,500,000 shares authorized;
    none and 2,155,715 Series A shares issued and outstanding
    at December 31, 2008 and 2007, respectively (aggregate
    liquidation preference of $10,000 at December 31, 2007)






5,081Shareholders equity:Common stock, no par value, 105,000,000 shares authorized;
    65,970,653 and 70,118,166 shares issued and outstanding at
    December 31, 2008 and 2007, respectively


84,028



108,387Accumulated deficit


(16,405
)


(51,670
)Accumulated other comprehensive income


269



54Total shareholders equity


67,892



56,771Total liabilities, preferred stock and shareholders equity

$
89,146


$
78,448    59




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.



CONSOLIDATED
    STATEMENTS OF OPERATIONS  Years Ended December 31,2008


2007


2006(In thousands, except per share amounts)Net sales

$
95,248


$
49,768


$
12,788Cost of sales (exclusive of amortization of purchased technology)


7,304



5,295



3,000Gross profit


87,944



44,473



9,788Operating expenses:Selling, general and administrative


19,247



17,662



17,282Research and development


10,614



4,758



3,033Depreciation and amortization


503



498



316Total operating expenses


30,364



22,918



20,631Income (loss) from operations


57,580



21,555



(10,843
)Other income:Interest income


1,064



762



607Other income, net


11



229



127Gain on sale of product lines


75



448



Total other income


1,150



1,439



734Income (loss) before income taxes


58,730



22,994



(10,109
)Income tax expense (benefit)


18,198



(14,592
)


Net income (loss)


40,532



37,586



(10,109
)Deemed dividend on Series A preferred stock


5,267







Allocation of undistributed earnings to Series A preferred
    stock






1,137



Net income (loss) applicable to common shareholders

$
35,265


$
36,449


$
(10,109
)Net income (loss) per share applicable to common shareholders:Basic

$
0.52


$
0.53


$
(0.18
)Diluted

$
0.49


$
0.51


$
(0.18
)Shares used in computing net income (loss) per share applicable
    to common shareholders:Basic


67,761



69,131



56,732Diluted


71,350



70,915



56,732    60




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.



CONSOLIDATED
    STATEMENTS OF PREFERRED STOCK AND SHAREHOLDERS
    EQUITY  AccumulatedOther


TotalSeries A Preferred Stock


Common Stock


Deferred


Accumulated


Comprehensive


ShareholdersShares


Amount


Shares


Amount


Compensation


Deficit


Gain (Loss)


Equity(In thousands, except share amounts)Balances at January 1, 2006


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 upon cashless exercise of warrant










1,647,440



















Issuance of common stock upon exercise of warrants










18,500



12















12Issuance of common stock in stock offering, net of issuance costs










11,400,000



12,741















12,741Comprehensive 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 loss






























37,639Balances at December 31, 2007


2,155,715



5,081



70,118,166



108,387







(51,670
)


54



56,771Stock compensation for equity incentives and restricted common
    stock granted to consultants and employees










233,296



4,119















4,119Issuance of common stock pursuant to employee stock purchase plan










803,616



494















494Issuance of common stock upon exercise of stock options










2,109,133



1,667















1,667Issuance of common stock upon cashless exercise of warrants










348,228



















Repurchase of Series A Preferred Stock


(2,155,715
)


(5,081
)














(5,267
)






(5,267
)Repurchase of common stock










(7,490,900
)


(35,571
)














(35,571
)Cancellation of unvested restricted stock










(145,809
)


















Cancellation of shares related to tax liability










(5,077
)


















Income tax benefit realized from share-based compensation plans














4,932















4,932Comprehensive income (loss):Net unrealized gain on investments


























215



215Net income






















40,532







40,532Total comprehensive income






























40,747Balances at December 31, 2008





$




65,970,653


$
84,028


$



$
(16,405
)

$
269


$
67,892    61




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.



CONSOLIDATED
    STATEMENTS OF CASH FLOWS  Years Ended December 31,2008


2007


2006(In thousands)Cash Flows From Operating ActivitiesNet income (loss)

$
40,532


$
37,586


$
(10,109
)Adjustments to reconcile net income (loss) to net cash provided
    by (used in) operating activities:Share-based compensation expense


4,119



1,811



1,154Deferred income taxes


4,649



(15,922
)


Amortization of investments


(456
)


(387
)


Depreciation and amortization


503



498



316Gain on sale of product lines


(75
)


(448
)


Loss on disposal of equipment






12



Income tax benefit realized from share-based compensation plans


4,932







Excess tax benefit from share-based compensation plans


(4,841
)






Other










5Changes in operating assets and liabilities:Accounts receivable


13,221



(21,856
)


(1,058
)Inventories


(94
)


600



(1,388
)Prepaid income taxes


(3,316
)






Prepaid expenses and other current assets


(323
)


33



(101
)Accounts payable


2,525



(377
)


649Accrued compensation


(49
)


926



310Sales-related reserves


3,649



5,392



203Income taxes payable


(1,330
)


1,330



(200
)Other accrued liabilities


210



971



(111
)Other non-current liabilities


(347
)


(103
)


602Net cash provided by (used in) operating activities


63,509



10,066



(9,728
)Cash Flows From Investing ActivitiesAcquisition of purchased technology






(300
)


(4,086
)Purchase of short-term investments


(69,613
)


(27,995
)


(10,136
)Proceeds from the sale and maturities of short-term investments


42,388



16,650



13,790Purchase of property, equipment and leasehold improvements


(133
)


(69
)


(205
)Net proceeds from sale of product lines


75



448



Changes in deposits and other assets


34



(22
)


83Net cash used in investing activities


(27,249
)


(11,288
)


(554
)Cash Flows From Financing ActivitiesIssuance of common stock in stock offering, net










12,741Issuance of common stock and warrants


2,161



1,224



881Repurchase of Series A preferred stock


(10,348
)






Repurchase of common stock


(35,571
)






Redemption of Series B preferred stock










(7,841
)Excess tax benefit from share-based compensation plans


4,841







Net cash provided by (used in) financing activities


(38,917
)


1,224



5,781Increase (decrease) in cash and cash equivalents


(2,657
)


2



(4,501
)Cash and cash equivalents at beginning of year


15,939



15,937



20,438Cash and cash equivalents at end of year

$
13,282


$
15,939


$
15,937Supplemental Disclosures of Cash Flow Information:Cash paid for interest

$
4


$



$
Cash paid for income taxes

$
13,232


$



$
193    62




---



##### 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
      Product Development
     63




---



##### Table of Contents



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

2008


2007CuraScript


99
%


97
%Wholesaler A



%



%Wholesaler B



%



%Wholesaler C



%



%Other customers


1
%


3
%100
%


100
%   64




---



##### Table of Contents



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

2008


2007


2006CuraScript


99
%


80
%



%Wholesaler A



%


7
%


36
%Wholesaler B



%


6
%


28
%Wholesaler C



%


3
%


27
%Other customers


1
%


4
%


9
%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
  Product Acquisitions
  Impairment
    of Long-Lived Assets
   65




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fair
    Value
  Fair Value Measurements FAS 157-3, Determining Fair Value of a Financial Asset When the Market
    for That Asset is Not Active, FAS 157-2. Investments
  Revenue
    Recognition
       66




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
                 67




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          December 31,2008


2007Product returns  credit memoranda policy

$
218


$
1,307Product returns  product replacement policy


37



31Medicaid rebates


11,406



6,514Government chargebacks


164



222Other






102$
11,825


$
8,176   Shipping
    and Handling Costs
    Research
    and Development
    Net
    Income (Loss) Per Share Applicable to Common
    Shareholders
  Earnings per Share
 68




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  03-06, Participating Securities and the Two-Class Method Under
    SFAS 128 No. 03-06). No. 03-06 Preferred Stock and
    Shareholders Equity
    Years Ended December 31,2008


2007


2006Net income (loss) applicable to common shareholders

$
35,265


$
36,449


$
(10,109
)Shares used in computing net income (loss) per share applicable
    to common shareholders:Basic


67,761



69,131



56,732Effect of dilutive potential common shares:Stock options


3,434



1,660



Warrants and placement agent unit options


136



118



Restricted stock


19



6



Diluted


71,350



70,915



56,732Net income (loss) per share applicable to common shareholders:Basic

$
0.52


$
0.53


$
(0.18
)Diluted

$
0.49


$
0.51


$
(0.18
)  69




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Years Ended December 31,2008

2007Stock options


1,093



3,851Restricted stock


197



53Series A Preferred Stock


294



2,156Warrants and placement agent unit options






270     Share-Based
    Compensation
  Share-Based
    Payment
  EITF 96-18, Accounting for Equity Instruments that are Issued to Other
    than Employees for Acquiring, or in conjunction with Selling
    Goods or Services,
 70




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Stock
    Repurchases
    Income
    Taxes
        Accounting for Uncertainty
    in Income Taxes  an interpretation of FASB Statement
    No. 109 Income Taxes
  Comprehensive
    Income (Loss)
  Reporting Comprehensive Income,
 71




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Reclassifications
    Segment
    Information
      Recently
    Issued Accounting Standards
  FAS 157-3, Determining the Fair Value of a Financial Asset When the
    Market for That Asset Is Not Active FAS 157-3). FAS 157-3 FAS 157-3 FAS 157-3 FAS 157-3
  FAS 157-2, Effective Date of FASB Statement No. 157 FAS 157-2), FAS 157-2. FAS 157-2
  Business Combinations
  No. 07-1, Accounting for Collaborative Arrangements Related to the
    Development and Commercialization of Intellectual Property (EITF 07-1). EITF 07-1
 72




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  EITF 07-1
  2.
    Sale of
    Product Lines      3.
    Product
    Development  ®
  4.
    Product
    Acquisitions   73




---



##### Table of Contents



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


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gain


(Loss)


Fair ValueDecember 31, 2008Cash equivalents

$
10,293


$



$



$
10,293Short-term investments:Commercial paper

$
7,830


$
59


$



$
7,889Government-sponsored enterprises


30,309



210







30,519Municipal bonds


3,762







(1
)


3,761$
41,901


$
269


$
(1
)

$
42,169December 31, 2007Cash equivalents

$
15,750


$



$



$
15,750Short-term investments:Commercial paper

$
11,916


$
55


$



$
11,971Corporate bonds


2,303







(1
)


2,302$
14,219


$
55


$
(1
)

$
14,273     Amortized


Estimated FairCost


ValueDue in one year or less

$
48,432


$
48,701Due after one through two years


3,762



3,761Total available-for-sale securities

$
52,194


$
52,462     Fair
    Value
  Fair Value Measurements
 74




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Cash equivalents:
  Short-term available-for-sale investments at fair value
    Basis of Fair Value MeasurementsQuoted Prices


Significantin Active


Other


SignificantBalance at


Markets for


Observable


UnobservableDecember 31,


Identical Items


Inputs


Inputs2008


(Level 1)


(Level 2)


(Level 3)Cash equivalents

$
10,293


$
10,293


$



$
Commercial paper


7,889







7,889



Government-sponsored enterprises


30,519







30,519



Municipal bonds


3,761







3,761



Total

$
52,462


$
10,293


$
42,169


$
    75




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    6.
    Inventories    December 31,2008


2007Raw materials

$
2,056


$
1,987Finished goods


432



387Less allowance for excess and obsolete inventories


(29
)


(9
)$
2,459


$
2,365   7.
    Property
    and Equipment    December 31,2008


2007Laboratory equipment

$
8


$
8Manufacturing equipment


666



648Office equipment, furniture and fixtures


1,155



1,085Leasehold improvements


408



4082,237



2,149Less accumulated depreciation and amortization


(1,787
)


(1,627
)$
450


$
522     8.
    Purchased
    Technology and Goodwill    December 31,2008


2007Purchased technology

$
4,386


$
4,386Less accumulated amortization


(717
)


(419
)$
3,669


$
3,967   Product Acquisitions
 76




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2008


2007Goodwill

$
1,023


$
1,023Less accumulated amortization


(724
)


(724
)$
299


$
299   Goodwill and Other
    Intangible Assets
  9.
    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


Total2009

$
592


$
839


$
(376
)

$
164


$
1,2192010


616



870



(385
)


122



1,2232011


155



902



(397
)


65



7252012






816



(375
)


5



4462013


















Thereafter


















$
1,363


$
3,427


$
(1,533
)

$
356


$
3,613  77




---



##### 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.
        Contingencies
  Subsequent Events
 78




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Commitments
    10.
    Preferred
    Stock and Shareholders Equity  Preferred
    Stock
     79




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Common
    Stock
  winding-up
        Related Party
    Transactions
  Warrants
    Outstanding
    Equity
    Incentive Plans and Share-Based Compensation
    Expense
   80




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         81




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Years Ended December 31,2008


2007


2006Cost of sales

$



$
5


$
6Selling, general and administrative


3,351



1,488



965Research and development


590



322



56Total share-based compensation expense


3,941



1,815



1,027Tax benefit related to share-based compensation expense


(483
)






Net effect on net income

$
3,458


$
1,815


$
1,027       82




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Years Ended December 31,2008

2007

2006Expected volatility


84-86
%


82-86
%


90-98
%Weighted average volatility


86
%


85
%


94
%Risk-free interest rate


1.3-3.2
%


3.6-4.9
%


4.6-5.1
%Expected term (in years)


4.2-4.4



6.25



6.25Expected dividend yield


0



0



0     Years Ended December 31,2008

2007

2006Expected volatility


68-81
%


65-151
%


70-98
%Weighted average volatility


79
%


133
%


81
%Risk-free interest rate


1-2.8
%


3.2-5.0
%


4.6-5.1
%Expected term (in years)


0.30-0.74



0.25-1.0



0.25-1.0Expected dividend yield


0



0



0      83




---



##### Table of Contents



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

AverageAverage

RemainingStock

Exercise

Contractual

AggregateOptions

Price

Term

Intrinsic Value(In years)

(In thousands)Outstanding 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


$
27,365Granted


1,634,500



5.27Exercised


(2,109,133
)


0.81Forfeited or expired


(35,240
)


3.50Outstanding at December 31, 2008


5,092,552


$
2.34



7.56


$
35,491Vested and exercisable at December 31, 2008


2,382,017


$
1.08



6.53


$
19,596       Weighted-AverageRestricted

Grant Date FairStock

ValueNonvested shares at December 31, 2007


42,603


$
1.69Granted


233,296



5.10Vested


(14,201
)


1.69Forfeited or expired


(145,809
)


5.10Nonvested shares at December 31, 2008


115,889


$
4.26    84




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Reserved
    Shares
    December 31,2008Outstanding stock options


5,092,552Future grant under equity incentive award plans


2,750,536Future sale under the employee stock purchase plan


559,3758,402,463   11.
    Income
    Taxes    Years Ended December 31,2008


2007


2006Current:Federal

$
10,766


$
590


$
State


2,783



740



13,549



1,330



Deferred:Federal


5,327



(14,129
)


State


(678
)


(1,793
)


4,649



(15,922
)


Total income tax expense (benefit)

$
18,198


$
(14,592
)

$
       Years Ended December 31,2008


2007


2006Tax at U.S. statutory rate


35.0
%


35.0
%


(34.0
)%State income taxes, net


3.6



2.1



(5.6
)Change in valuation allowance


(8.8
)


(101.0
)


38.2Other


1.2



0.4



1.4Effective tax rate


31.0
%


(63.5
)%



%  85




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      December 31,2008


2007Deferred tax liabilities:Goodwill and purchased intangibles

$
100


$
105Deferred tax assets:Net operating loss carryforwards


4,913



14,358Research and development credits


1,049



1,387Sales-related reserves


4,585



3,381Other, net


826



2,081Total deferred tax assets


11,373



21,207Valuation allowance






(5,180
)Net deferred taxes

$
11,273


$
15,922        86




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Accounting for Uncertainty in Income Taxes
  Years EndedDecember 31,2008


2007Balance at beginning of year

$
315


$
315Additions based on tax positions related to the current year






Reductions for tax positions of prior years






Balance at end of year

$
315


$
315     12.
    Related
    Party Transactions  Preferred Stock and
    Shareholders Equity
 87




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Preferred Stock and Shareholders Equity
      13.
    Defined
    Contribution Plan    14.
    Comprehensive
    Income (Loss)    Years Ended December 31,2008


2007


2006Net income (loss)

$
40,532


$
37,586


$
(10,109
)Net unrealized gain on available-for-sale securities


215



53



3Comprehensive income (loss)

$
40,747


$
37,639


$
(10,106
)   15.
    Shareholder
    Rights Plan   88




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      16.
    Subsequent
    Events     89




---



##### Table of Contents



QUESTCOR
    PHARMACEUTICALS, INC.
    FINANCIAL STATEMENT SCHEDULES (ITEM 15(a)(2))
    SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
    Years Ended December 31, 2008, 2007 and 2006  Additions/Balance at

(Deductions)

Deductions

Balance atBeginning

Charged to

and

End ofof Period

Income

Write-Offs

Period(In thousands)Reserves for uncollectible accountsDecember 31, 2008

$
57


$
68


$
63


$
62December 31, 2007

$
55


$
4


$
2


$
57December 31, 2006

$
84


$
16


$
45


$
55Reserves for cash discountsDecember 31, 2008

$
3


$
17


$
19


$
1December 31, 2007

$
32


$
227


$
256


$
3December 31, 2006

$
16


$
308


$
292


$
32Reserves for obsolete and excess inventoriesDecember 31, 2008

$
9


$
20


$



$
29December 31, 2007

$
237


$
307


$
535


$
9December 31, 2006

$
100


$
137


$



$
237Sales-related reservesDecember 31, 2008

$
8,176


$
38,006


$
34,357


$
11,825December 31, 2007

$
2,784


$
12,081


$
6,689


$
8,176December 31, 2006

$
2,581


$
2,767


$
2,564


$
2,784    90




---



##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber

Description2
.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(21)

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
.4(3)

Certificate of Determination of Series C Junior
    Participating Preferred Stock of the Company.3
.5(4)

Amended and Restated Bylaws of the Company, dated as of
    March 5, 2008.4
.2(5)

Convertible Debenture between the Company and Defiante
    Farmaceutica Unipessoal Lda dated March 15, 2002.10
.1(6)

Forms of Incentive Stock Option and Non-statutory Stock Option.10
.2(7)

1992 Employee Stock Option Plan, as amended.**10
.3(8)

1993 Non-employee Directors Equity Incentive Plan, as
    amended and related form of Nonstatutory Stock Option.**10
.5(9)

Asset Purchase Agreement dated July 27, 2001 between the
    Company and Aventis Pharmaceuticals Products, Inc.10
.6(9)

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

Stock Purchase Agreement dated July 31, 2001 between
    Registrant and Sigma-Tau Finance Holding S.A.10
.8(11)

Warrant dated December 1, 2001 between the Company and
    Paolo Cavazza.10
.9(11)

Warrant dated December 1, 2001 between the Company and
    Claudio Cavazza.10
.13(5)

Securities Purchase Agreement between the Company and Defiante
    Farmaceutica Unipessoal Lda dated March 15, 2002.10
.14(5)

Registration Rights Agreement between the Company and Defiante
    Farmaceutica Unipessoal Lda dated March 15, 2002.10
.15(5)

Warrant between the Company and Defiante Farmaceutica Unipessoal
    Lda dated March 15, 2002.10
.17(3)

Rights Agreement, dated as of February 11, 2003, between
    the Company and Computershare Trust Company, Inc.10
.21(12)

Supply Agreement dated April 1, 2003 between the Company
    and BioVectra, dcl.10
.23(13)

Secured Promissory Note and Security Agreement dated
    July 31, 2004 between the Company and Defiante Farmaceutica
    Lda.10
.25(14)

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
.27(15)

2004 Non-Employee Directors Equity Incentive Plan.**10
.30(16)

Letter Agreement between the Company and Steve Cartt dated
    March 7, 2005.**10
.31(16)

Letter Agreement between the Company and Steve Cartt dated
    March 8, 2005.**10
.36(17)

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(18)

Offer of Employment Letter Agreement between the Company and
    George Stuart dated September 27, 2005.**10
.38(18)

Change-in-Control
    Letter Agreement between the Company and George Stuart dated
    September 28, 2005.**10
.39(18)

Severance Letter Agreement between the Company and George Stuart
    dated September 28, 2005.**10
.40(19)

Asset Purchase Agreement dated October 17, 2005 by and
    between Questcor Pharmaceuticals, Inc. and QOL Medical LLC.10
.44(20)

Severance Letter Agreement between the Company and David
    Medeiros dated July 10, 2003.**10
.45(22)

2006 Equity Incentive Award Plan.**




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##### Table of Contents



ExhibitNumber

Description10
.46(23)

Form of Incentive Stock Option Agreement under the 2006 Equity
    Incentive Award Plan.10
.47(23)

Form of Non-Qualified Stock Option Agreement under the 2006
    Equity Incentive Award Plan.10
.48(23)

Form of Restricted Stock Award Agreement under the 2006 Equity
    Incentive Award Plan.10
.50(24)

Offer of Employment Letter Agreement between the Company and
    Steven Halladay dated October 13, 2006.**10
.51(24)

Change-in-Control
    Letter Agreement between the Company and Steven Halladay dated
    October 16, 2006.**10
.52(24)

Severance Letter Agreement between the Company and Steven
    Halladay dated October 16, 2006.**10
.58(25)

Amended Change of Control Letter Agreement between the Company
    and Stephen L. Cartt dated February 13, 2007.**10
.60(25)

Amended Change of Control Letter Agreement between the Company
    and George M. Stuart dated February 13, 2007.**10
.62(25)

Amended Change of Control Letter Agreement between the Company
    and Steven Halladay dated February 13, 2007.**10
.63(25)

Change of Control Letter Agreement between the Company and David
    J. Medeiros dated February 13, 2007.**10
.65(26)

Form of Performance-Based Vesting Stock Option Agreement under
    the 2006 Equity Incentive Award Plan.10
.66(27)

Severance Agreement between the Company and David J. Medeiros
    dated July 16, 2007.**10
.68(28)

Form of Option Agreement for Director Options.10
.69(28)

Form of Option Agreement for Committee Options.10
.70(29)

Amended and Restated 2003 Employee Stock Purchase Plan.**10
.71(30)

Transition Agreement between the Company and George M. Stuart
    dated July 31, 2008.**10
.72(31)

Stock Purchase Agreement, by and between the Company and
    Chaumiere Consultadoria & Servicos SDC Unipessoal
    L.D.A., dated August 13, 2008.10
.73(32)

Stock Purchase Agreement, by and between the Company and
    Inverlochy Consultadoria & Servicos L.D.A., dated
    September 3, 2008.10
.74*

Redemption Agreement, by and between the Company and Shire
    Pharmaceuticals, Inc., dated February 19, 2008.10
.75*

Severance Letter Agreement between the Company and Gary M. Sawka
    dated September 10, 2008.**10
.76*

Offer of Employment Letter Agreement between the Company and
    Gary M. Sawka dated September 9, 2008.**10
.77*

Amended and Restated Employment Agreement between the Company
    and Don Bailey dated December 19, 2008.**10
.78*

Form of 409A Letter Amendment to Officers Severance,
    Change in Control and Employment Agreements.**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.**
    
    This exhibit is identified as a management contract or
    compensatory plan or arrangement pursuant to Item 15(a)(3)
    of
    Form 10-K.(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 Current Report on
    Form 8-K
    on March 27, 2008, and incorporated herein by reference.




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##### Table of Contents



(3)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on February 14, 2003, and incorporated herein by
    reference.(4)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    on March 5, 2008, and incorporated herein by reference.(5)
    
    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.(6)
    
    Filed as an exhibit to the Companys Registration Statement
    on
    Form S-1,
    Registration
    No. 33-51682,
    and incorporated herein by reference.(7)
    
    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.(8)
    
    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.(9)
    
    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.(10)
    
    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.(11)
    
    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.(12)
    
    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.(13)
    
    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.(14)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on March 14, 2005, and incorporated herein by
    reference.(15)
    
    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.(16)
    
    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.(17)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on September 13, 2005, and incorporated herein by
    reference.(18)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on September 30, 2005, and incorporated herein by
    reference.(19)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on October 19, 2005, 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, 2005, and
    incorporated herein by reference.(21)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on May 10, 2006, and incorporated herein by reference.(22)
    
    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.(23)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on May 24, 2006, and incorporated herein by reference.(24)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on October 18, 2006, and incorporated herein by
    reference.(25)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on February 15, 2007, and incorporated herein by
    reference.(26)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on July 3, 2007, and incorporated herein by reference.




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##### Table of Contents



(27)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on July 20, 2007, and incorporated herein by
    reference.(28)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on January 4, 2008, and incorporated herein by
    reference.(29)
    
    Filed as an exhibit to the Companys Definitive Proxy on
    Schedule 14A filed on April 21, 2008, and incorporated
    herein by reference(30)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on August 5, 2008, and incorporated herein by
    reference.(31)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on August 19, 2008, and incorporated herein by
    reference.(32)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on September 9, 2008, and incorporated herein by
    reference.
    
    The Company has requested confidential treatment with respect to
    portions of this exhibit.