![]() "Despite challenging market dynamics for VASOSTRICT, our first-quarter financial performance was in-line with our expectations with growth in our Branded Specialty Products portfolio driven by XIAFLEX® and our Generics segment driven by varenicline, the only FDA approved generic for Chantix," Chief Executive Blaise Coleman noted. Revenue from Sterile Injectables dropped ~22% YoY to $240.0M, while Generic Pharmaceuticals and Specialty Products added $185.9M and $149.1M with ~3% YoY and ~4% YoY growth. Revenue for the quarter slipped ~9% YoY to $652.3M, driven by a ~12% YoY decline in the Established Products segment, which generated $55.8M revenue. Generic drugmaker Endo International (NASDAQ:ENDP) has lost ~29% in the pre-market Friday as the company set its 2Q guidance below the consensus. After that, investors may use this five-year discounted cash flow EBITDA Exit model to estimate a fair value. Investors may bet on the court siding with the company. The Opioid litigation is the biggest headwind to Endo stock between now and late summer. This would offset the higher generic competition in the back half of 2021. Xiaflex demand should increase throughout the year. The company gave a conservative forecast when a stronger bounce back is possible. Fortunately, Vasostrict demand levels will return to pre-Covid-19 levels. The generics portfolio faces more competition than expected. Shareholders priced the stock for an unfavorable legal outcome and a distracted management team. CEO Coleman said that the legal team would focus on litigation while the rest of the team focuses on the day-to-day business execution. A successful appeal would lift the overhang hurting the stock. The company has a damage trial scheduled to start on July 26. I'd also like to clarify that, despite certain press reports, that there has been no finding to date that Endo's owes any amount as a result of the default order." President and Chief Executive Officer Coleman said "we strongly disagree with the court's default order on liability. The opioid litigation remains a headwind for Endo. Conversely, the stock could break out above around $6.35 as investors await positive clinical results later this year. If that fails, the stock risks re-testing past lows. ENDP shares will have to break out above the moving averages. In the chart above, the MACD (moving average convergence divergence) crossed over twice recently, sending a "buy" signal. This is offset by "higher generic competition in the back half of the year that we didn't see was kind of delayed from our expectations." CFO Mark Bradley said on the conference call that demand for Xiaflex is a tailwind for the rest of the year. The bad news is that the company expects revenue from generic pharmaceuticals will fall in the mid to high 20s. And adjusted gross margin will be in the range of 70% - 71% in FY 2021. Fortunately, expenses as a percentage of revenue are mostly unchanged (28.5%-29.0%). It also raised its interest expense slightly. OutlookĮndo raised the bottom range of the adjusted EBITDA and adjusted diluted net income per share forecast: This will include raising consumer brand awareness as it uses such techniques as geo-fencing and geo-targeting to improve sales. Management has a focus on the direct-to-consumer rollout. ![]() Plus, it has around 30 projects in development, with 78% of them in the sterile injectables product category. It also has 50 pending filings, mostly in the generic specialty segment. This year, Endo will have around 10 product launches in the sterile injectables and generic pipeline. ![]() ![]() In the Sterile Injectables segment, Covid-19 helped Vasostrict demand, offset by competition for Adrenalin. The company believes that the unmet need for patients seeking treatment for plantar fibromatosis and adhesive capsulitis is an opportunity for Endo. Investors may align the positive news ahead for the Xiaflex to accumulating shares: Xiaflex will publish proof-of-concept study results in the coming months for the plantar fibromatosis treatment. Growth slowed considerably, giving ENDP stock a D- as shown below:Įndo's Branded Pharmaceuticals revenue fell by 9% due to higher competition, offset by strength in Xiaflex and Suppelin LA: The stock's underperformance running contrary to its strong quarter raised its value and profitability score. It also issued full-year 2021 revenue guidance of $2.65 billion to $2.79 billion, above consensus estimates. What happened and, more importantly, did shares bottom from here? Strong First QuarterĮndo posted non-GAAP earnings a share of 73 cents despite revenue falling 12.5% Y/Y to $717.9 million. ENDP stock would have returned more had it not peaked in February. A little over a year after calling Endo International ( ENDP) a good trade, it returned around 43%. ![]()
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