ENDP - Endo Health Solutions Inc.

[giofranchi]

Endo Completes Acquisition of Par Pharmaceutical and Provides Financial Guidance

 

http://www.prnewswire.com/news-releases/endo-completes-acquisition-of-par-pharmaceutical-and-provides-financial-guidance-300149703.html

 

Cheers,

 

Gio

[Aman1]

Anyone still follow this company? Wondering if the baby has been chucked out with the bathwater with regards to wider specialty pharma.

 

Basically is the business model of all these companies flawed, or do we consider VRX acutely aggressive and (arguably?) fraudulent, and go about buying other names in an unloved sector?

 

Endo specficially have a certain amount of muck attached as the CEO was previously the COO of VRX, but taking a quick look at his history and he's got a long and distinguished career across multiple pharma companies rather than a VRX lifer (which would be of more concern).

 

I can't profess to know this name particularly well, but a quick-and-dirty look shows a company still growing (albeit revising guidance down 3 weeks after results highlights a lack of visibility for the company) and with a significant exposure to generics (which presumably limits the amount of price-gouging that might be going on across the portfolio).

 

Guess I can't ignore something at 5x P/E without stopping to ask if there is value here. Again, just using basic rule of thumb, but this implies rather than any growth coming through, we would need to see c.40% decline in earnings before we reach some sort of normal profitability (assuming high single digit P/E at normalised profit levels)- this feels seems somewhat overly negative based on downwardly revised EPS guidance that is still projecting growth of around 10% YoY.

 

That said I don't know specialty pharma at all, this is just a company that's always been on a long-list of mine as someone flagged it to me as an interesting idea at twice the current share price.

 

I'd be interested to know if anyone has any current thoughts on Endo or other specialty pharma companies more generally, specifically *excluding* Valeant?

[netnet]

The numbers are all 'adjusted' non-GAAP, which can be a source of much mischief in the wrong hands.

[Jurgis]

Hah, I noticed this fallen valiant (yeah, pun intended) in Barron's chart section. Just looked at numbers. OMG what a mess. OK, so tons of acquisitions, tons of asset writeoffs, so no earnings, completely hosed balance sheet. So I look at CF statement and they have no OCF either... wth?

 

I'm sure there's story here and someone smarter than me might get it. I'll skip.

 

I have some CXRX. There's thread here on CoBF: http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/cxrx-concordia-healthcare/msg238770/#msg238770 .

Another fallen valiant. Might be a bit better ... perhaps. They also did big acquisition last year, so no real numbers...

Edit: CXRX announcing 4q results today (March 23rd) after close - grab popcorn!

[Aman1]

U.S. FTC sues Endo for violating antitrust laws

 

The U.S. Federal Trade Commission said it filed a complaint in a district court accusing some drugmakers, including Endo International Plc, of violating antitrust laws by striking deals to block consumers' access to generic copies of their drugs.

 

The FTC's complaint alleges that Endo paid the first generic companies that filed for FDA approval – Impax Laboratories Inc and Watson Laboratories, a unit of Allergan Plc – to eliminate the risk of competition for two of its pain drugs. (1.usa.gov/1PHztNS)

 

--------

 

[deletes partially completed Endo model]

 

Maybe I'll pick something a little simpler and less noisy to look at.... I'm not great with the knuckleball pitch. Not too much sunk cost here for me so not remotely a wrench to walk away!

 

 

 

[Aman1]

Things just got a whole lot worse with Endo - looks like a good dodge for everyone that avoided the messy accounts...

 

Stock is currently down 40%is on the day at $16.28 versus around $30 when I last posted about Endo a month ago.

 

"However, as we move further into 2016, we are rebasing our full-year financial expectations due to the impact of several previously unanticipated headwinds: new competitive entrants, including for Voltaren® Gel; greater than expected price erosion across the Generics sector; and delays on regulatory actions related to certain Endo products. We are also continuing to evolve Endo's corporate strategy and are taking decisive action to best position the Company for a return to long-term, organic growth within a rapidly changing market environment. We look forward to executing on this evolved strategy to deliver products that improve patients' lives while creating value for our shareholders."

 

[scorpioncapital]

I tend to think getting your dirty laundry out is usually a good thing - assuming there isn't much more to come.