Shares of ENDP are lower by 18% in the after-hours after reporting a truly heinous quarter. ENDP is one of several stocks targeted by short sellers, along with MNK and VRX, for jacking up the prices of their drugs. As you can see by this quarter and guidance, pricing power has reversed and deflationary forces are taking hold.
- Reports Q1 (Mar) earnings of $1.08 per share, $0.04 better than the Capital IQ Consensus of $1.04; revenues rose 34.9% year/year to $963.54 mln vs the $956.08 mln Capital IQ Consensus.
- Co lowers guidance for FY16, sees EPS of $4.50-4.80 (Prior $5.85-6.20) vs. $5.70 Capital IQ Consensus Estimate; sees FY16 revs of $3.87-4.03 bln (Prior $4.32-4.52 bln) vs. $4.3 bln Capital IQ Consensus Estimate.
- As of March 31, 2016, the Company had $222.0 million in unrestricted cash; net debt of approximately $8.6 billion and a net debt to pro forma adjusted EBITDA ratio of 4.61.
- Corporate strategy & business update:
- Branded Pharmaceuticals commercial operations: Endo continues to prioritize its investment on key near-term growth opportunities: XIAFLEX® and BELBUCA™.
- Branded Pharmaceuticals R&D Pipeline: Endo is also accelerating timelines for its XIAFLEX® R&D pipeline with plans to move at least five programs into clinical trials this year.
- Generics manufacturing operations: As part of Endo’s ongoing Generics business integration and optimization efforts, the Company is announcing an accelerated restructuring of its Generics product and R&D portfolio, as well as its manufacturing facility network. This restructuring is expected to result in approximately $60 million in net run rate cost savings in 2017 and is expected to result in the closure of the Company’s facility in Charlotte, North Carolina, and a workforce reduction at its facility in Huntsville, Alabama.
- Generics R&D: the Company reiterated its intention to launch approximately 30 products from its newly combined pipeline in 2016 and to file approximately 25 to 30 abbreviated new drug applications with U.S. Food and Drug Administration.
- Corporate: Endo will focus on opportunities to continue to optimize its business, fund investment in new growth opportunities and to de-lever in the medium term.
