Good News Buoys Endo Pharma - Analyst Blog
20 Mai 2011 - 3:23PM
Zacks
Recently, the US Food and Drug Administration (FDA) helped boost
Endo Pharmaceuticals’ (ENDP) generic portfolio by
approving dexamethasone elixir and Orsythia tablets.
Dexamethasone elixir is approved to treat patients suffering
from endocrine disorders, rheumatic disorders and collagen
diseases. Orsythia tablets are approved to prevent pregnancy in
women who use oral contraceptives.
The two generic drugs were added to Endo Pharma’s portfolio with
the acquisition of Qualitest Pharmaceuticals (a generic company)
late last year for $1.2 billion in cash. The acquisition
diversified Endo Pharma’s business and bolstered its position in
the generic and pain drug portfolios.
Endo Pharma projects sales from the generic segment to grow at a
compounded annual growth rate of at least 15% within the time
period of 2010-2012. Endo Pharma has approximately 49
abbreviated new drug applications (ANDAs) under review by the
FDA.
The company filed 3 ANDAs in the first quarter of 2011 and
intends to file 11 more ANDAs in 2011. Endo Pharma expects 14 ANDAs
to be cleared in 2011.
We note that Endo Pharma is on an acquisition spree to expand
its business. Apart from the Qualitest purchase, Endo Pharma
completed two more major acquisitions in 2010. Endo Pharma acquired
Penwest Pharmaceuticals Co. to sustain and drive growth in the area
of pain management and HealthTronics Inc., a provider of urology
products and services.
In April 2011, Endo Pharma announced that it will purchase
American Medical Systems (AMMD) a leading
pelvic-health devices provider, for $2.9 billion or $30.00 per
share in cash. The deal is expected to close in the third quarter
of 2011. We believe that these acquisitions are measures to counter
the loss of revenues due to the generic threat looming over Endo
Pharma.
Our Recommendation
Currently, we have a Neutral stance on Endo Pharma in the
long-run. The stock carries a Zacks #3 Rank (Hold recommendation)
in the short-run.
AMER MED SYS (AMMD): Free Stock Analysis Report
ENDO PHARMACEUT (ENDP): Free Stock Analysis Report
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