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Endo Pharmaceuticals Holdings Inc. Reports Operating Results (10-Q)

November 02, 2010 | About:
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10qk

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Endo Pharmaceuticals Holdings Inc. (ENDP) filed Quarterly Report for the period ended 2010-09-30.

Endo Pharmaceuticals Holdings Inc. has a market cap of $4.01 billion; its shares were traded at around $35.22 with a P/E ratio of 11.6 and P/S ratio of 2.8. Endo Pharmaceuticals Holdings Inc. had an annual average earning growth of 32.8% over the past 10 years.ENDP is in the portfolios of John Hussman of Hussman Economtrics Advisors, Inc., Chuck Royce of Royce& Associates, HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, Paul Tudor Jones of The Tudor Group, David Dreman of Dreman Value Management, Steven Cohen of SAC Capital Advisors, Bruce Kovner of Caxton Associates, Jeremy Grantham of GMO LLC.

Highlight of Business Operations:

On July 2, 2010 (the HealthTronics Acquisition Date), the Company completed its initial tender offer for all outstanding shares of common stock of HealthTronics. On July 12, 2010, Endo completed its acquisition of HealthTronics for approximately $214.8 million in aggregate cash consideration for 100% of the outstanding shares, at which time HealthTronics became a wholly-owned subsidiary of the Company. The HealthTronics Shares were purchased at a price of $4.85 per HealthTronics Share. In addition, Endo paid $40 million to retire HealthTronics debt that had been outstanding under its Senior Credit Facility. As a result of the acquisition, the HealthTronics Senior Credit Facility was terminated.

Endo intends to finance the purchase with existing cash, by utilizing all or a portion of our existing $300 million revolving credit facility and/or with the proceeds of one or more new financings, which may include a new term loan financing of up to $400 million pursuant to financing commitments that have been previously obtained by Endo.

Frova®. Net sales of Frova® for the three months ended September 30, 2010 decreased by $0.9 million or 6% from the comparable 2009 period. Net sales of Frova® for the nine months ended September 30, 2010 increased by $1.4 million or 3%. The decline for the three months ended September 30, 2010 were driven primarily by decreases in volume. For the nine months ended September 30, 2010, price increases more than offset the decline in volumes.

Other brands. Net sales of our other branded products for the three months ended September 30, 2010 decreased by $2.9 million from the comparable 2009 period. Net sales of our other branded products for the nine months ended September 30, 2010 increased by $3.8 million from the comparable 2009 period. These fluctuations are primarily driven by our February 2009 acquisition of Indevus, which contributed approximately $7.6 million and $14.2 million of net sales during the three months ended September 30, 2009 and the period from February 23, 2009 through September 30, 2009, respectively. This compares to $6.3 million and $26.0 million for the full three and nine months ended September 30, 2010, which also included revenues from our launch of ValstarTM in the third quarter of 2009.

Generics. Net sales of our generic products for the three months ended September 30, 2010 increased by $4.5 million, or 20% from the comparable 2009 period. Net sales of our generic products for the nine months ended September 30, 2010 decreased by $14.6 million, or 15% from the comparable 2009 period. The decrease in sales for the nine months ended September 30, 2010 is primarily attributable to a shortage of other competing generic opioids in the market during the first half of 2009, which was an anomaly and did not recur during 2010, partially offset by increased volumes during the three months ended September 30, 2010 as compared to 2009.

Other revenues. Royalty and other revenues for the three and nine months ended September 30, 2010 were $3.2 million and $9.6 million, respectively. Royalty and other revenues for the three and nine months ended September 30, 2009 were $2.7 million and $6.5 million, respectively. These amounts consist primarily of royalties earned on net sales of Sanctura® and Sanctura XR®.

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