Endo International plc – Ordinary Shares (NASDAQ:ENDP) announced that it has entered into an agreement with its partner, BioDelivery Sciences International, Inc. (BDSI), to return the BELBUCA buprenorphine) buccal film product to BDSI. Specific financial terms of the agreement have not been disclosed and are not material to Endo. Endo will not have any future royalty or milestone payments to BDSI and BDSI is not obligated for any future royalty payments to Endo.
With the return of BELBUCA to BDSI, Endo has a portfolio of established pain products that the Company believes no longer requires field sales promotion. As a result, Endo also announced today that it is eliminating its 375-member U.S. Branded pain sales field force, which consisted of both full-time employees and contract sales representatives, as well as internal support to the promoted pain business unit. This will allow the Company to focus efforts and resources more fully on its core U.S. Branded assets, including XIAFLEX in the approved indications and the cellulite development program. The Company’s legacy pain portfolio products – including OPANA ER and Percocet, among others will be managed as mature brands.
Endo expects to realize cost savings, drive greater efficiency and enhance its operational focus with its newly realigned U.S. Branded segment. The above-described strategic actions are expected to result in restructuring charges of approximately $62 million, including a $40 million noncash intangible asset impairment charge, and are expected to provide approximately $90 million to $100 million in annual run rate pre-tax gross cost savings in 2017. Endo anticipates a substantial portion of these cost savings will be redeployed in 2017 to support its core franchises, including the pursuit of the development and approval of XIAFLEX for cellulite following the Company’s recent announcement of positive Phase 2b data. The Company expects to provide 2017 Financial Guidance during its year-end Earnings call in late February 2017.
“Since we entered into our licensing and development agreement with BDSI in 2012, the opioid market and Endo’s strategic priorities have evolved. While we continue to believe BELBUCA is a differentiated asset, the product no longer aligns with Endo’s U.S. Branded segment strategy and our focus on core assets, including XIAFLEX®, moving forward. We believe that this path provides our U.S. Branded business with its best opportunity for success going forward,” said Paul Campanelli, President and CEO of Endo. “We are extremely grateful for the efforts of our Pain salesforce and all who have supported the Pain business unit and want to acknowledge their dedication, commitment and hard work on behalf of the Company. Additionally, we look forward to working with BDSI on a smooth transition and we wish them future success.”
“We are continuing our product-by-product portfolio assessment and the development of our full corporate strategy, which we plan to discuss in greater detail when we provide our fourth quarter and full year 2016 results in February 2017,” added Mr. Campanelli. (Original Source)
Shares of Endo are currently rising 0.20% to $15.12, or up $0.03 in pre-market trading Thursday. ENDP has a 1-year high of $63.63 and a 1-year low of $12.56. The stock’s 50-day moving average is $19.89 and its 200-day moving average is $18.96.
On the ratings front, Endo has been the subject of a number of recent research reports. In a report issued on December 6, Oppenheimer analyst Derek Archila reiterated a Hold rating on ENDP. Separately, on November 21, JMP’s Donald Ellis reiterated a Buy rating on the stock and has a price target of $34.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Derek Archila and Donald Ellis have a yearly average return of 1.5% and 14.7% respectively. Archila has a success rate of 75% and is ranked #2615 out of 4271 analysts, while Ellis has a success rate of 56% and is ranked #859.
Sentiment on the street is mostly neutral on ENDP stock. Out of 9 analysts who cover the stock, 5 suggest a Hold rating and 4 recommend to Buy the stock. The 12-month average price target assigned to the stock is $28.67, which represents a potential upside of 90% from where the stock is currently trading.
Endo International Plc operates as a pharmaceutical company. It focuses on developing, manufacturing, and distributing of branded and generic pharmaceutical products. It operates through the following segments U.S. Branded Pharmaceuticals, U.S. Generic pharmaceuticals, Devices, and International Pharmaceuticals. The U.S. Branded Pharmaceuticals offers products that focus on the treatment and management of conditions in urology, urologic oncology, endocrinology, and orthopedics. The U.S. Generic pharmaceuticals segment consist of a differentiated product portfolio including high-barrier-to-entry products, first-to-file or first-to-market opportunities that are difficult to formulate, difficult to manufacture or face complex legal and regulatory challenges. The Devices segment offers medical devices that deliver innovative medical technology solutions to physicians treating female incontinence and pelvic floor repair. The International Pharmaceuticals segment includes a variety of pharmaceutical products for the Canadian, Latin American, South African, and world markets.