Endo International plc – Ordinary Shares (ENDP): Will Opana ER Be Out Off the Market Soon?

Endo International plc (NASDAQ:ENDP) is on investors’ radars after the FDA’s Drug Safety and Risk Management Advisory Committee and the Anesthetic and Analgesic Drug Products Advisory Committee voted 8 yes, 18 no, and 1 abstain on the question; “Do the benefits of reformulated Opana ER continue to outweigh its risks.” That would be a big loss for Endo, as Opana ER is the company’s most profitable pain management drug.

As such, William Blair analyst Tim Lugo believes that the likelihood of Opana ER being pulled off the market has increased. The analyst commented, “We believe that Opana ER being taken off the market could lead to downside adjustments to 2017 guidance. If we assume the product is taken off the market in the second quarter, our full year 2017 estimate of $149 million would decrease to $50 million. We believe that gross margins for Opana ER are in the range of branded products (>80%) and removal of the revenue could impact the company’s 2017 gross margin guidance by as much as 100 basis points”

“Given that their pain salesforce has largely been dismantled following the return of Belbuca rights to BioDelivery Sciences, we think the product’s profitability is likely underappreciated despite the relative small contribution to the $3.4 billion top line. We don’t anticipate substantial restructuring charges to offset the top-line loss. Using these estimates, we believe that the bottom-line impact to Endo could be in the range of $0.20 to $0.30 in 2017 and 2018. We could see a downward adjustment to the company’s guidance and to our 2017 estimate of $3.56,” the analyst continued.


The analyst reiterated a Market Perform rating on Endo shares with a $15.00 price target.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Tim Lugo has a yearly average return of 15.6% and a 37% success rate. Lugo is ranked #565 out of 4539 analysts.

Out of the 20 analysts polled in the past 12 months, 12 rate Endo stock a Hold, while 8 rate the stock a Buy. With a return potential of 139%, the stock’s consensus target price stands at $25.12.


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