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Endo (ENDP) Q3 Earnings & Sales Top Estimates, View Raised

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Zacks Equity Research
·4 min read
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Endo International plc ENDP beats on both earnings and sales in the third quarter, driven by growth in its Branded Pharmaceuticals segment as utilization of physician-administered products continues returning to pre-COVID-19 levels.

The company’s earnings of 52 cents easily beat the Zacks Consensus Estimate of 14 cents in the reported quarter but declined from the year-ago quarter’s 66 cents.

Revenues came in at $634.9 million in the quarter, surpassing the Zacks Consensus Estimate of $558 million but decreasing 13% from the year-ago quarter. The decline was attributed to lower Generic Pharmaceuticals segment’s revenues.

Endo International plc Price, Consensus and EPS Surprise

Endo International plc Price, Consensus and EPS Surprise
Endo International plc Price, Consensus and EPS Surprise

Endo International plc price-consensus-eps-surprise-chart | Endo International plc Quote

Quarterly Highlights

Endo has four reportable business segments — Branded Pharmaceuticals, Generic Pharmaceuticals, Sterile Injectables and International Pharmaceuticals.

Branded Pharmaceuticals revenues were $223.6 million, up 3% year over year. Within the segment, Specialty Products revenues increased 6% to $140.1 million. Sales of Xiaflex increased 7% to $88.1 million. However, Established Products revenues decreased 2% to $83.5 million.

Sterile Injectables revenues came in at $251.4 million, down 5% year over year as a result of lower Aplisol revenues due to a nonrecurring resupply benefit witnessed in third-quarter 2019 and the ongoing competitive pressure on certain products. The decrease was somewhat offset by increased Vasostrict revenues.

Generic Pharmaceuticals reported sales of $136 million in the quarter, down 38% due to continued competitive pressure on certain key products.

International Pharmaceuticals revenues came in at $24.3 million, down 20% year over year.

During the quarter, Endo also announced a fill-finish manufacturing and services agreement for Novavax's NVAX COVID-19 vaccine candidate, NVX-CoV2373.

2020 Guidance Raised

Endo raised its annual guidance. Revenues for 2020 are now projected to be $2.75-$2.80 billion, up from the earlier projected range of $2.60-$2.70 billion. Adjusted earnings per share are now estimated to be $2.50-$2.55 (previous guidance: $2-$2.15).

Our Take

Endo reported better-than-expected results for the third quarter as the Branded Pharmaceuticals segment continues to maintain momentum. Moreover, the Sterile Injectables segment performed better than management’s expectations, driven by both favorable customer purchasing patterns and higher underlying utilization of certain critical-care products.

Earlier in the year, the FDA approved QWO (collagenase clostridium histolyticum-aaes) for the treatment of moderate-to-severe cellulite in the buttocks of adult women. This should strengthen the company’s portfolio.

Concurrently, the company announced the initiation of several strategic actions to optimize its operations and increase overall efficiency.

Shares of Endo have gained 3.8% in the year so far against the industry’s 3.9% decline.

 

Endo’s efforts to revive its business are encouraging. The company earlier announced that it will acquire commercial-stage biopharmaceutical company, BioSpecifics Technologies Corp. BSTC, for $88.50 per share in cash, or an estimated enterprise value of approximately $540 million.

Zacks Rank & A Stock to Consider

Endo currently carries a Zacks Rank # 2 (Buy). Another similar-ranked stock in the healthcare space is Dr. Reddy’s Laboratories Ltd RDY. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dr. Reddy’s earnings per share estimates have risen from $1.90 to $2.07 for 2021 and from $2.25 to $2.33 for 2022 over the past 30 days.

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Endo International plc (ENDP) : Free Stock Analysis Report
 
Dr. Reddys Laboratories Ltd (RDY) : Free Stock Analysis Report
 
Novavax, Inc. (NVAX) : Free Stock Analysis Report
 
BioSpecifics Technologies Corp (BSTC) : Free Stock Analysis Report
 
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