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ENDO REPORTS SECOND-QUARTER 2022 FINANCIAL RESULTS

·11 min read

DUBLIN, Aug. 9, 2022 /PRNewswire/ -- Endo International plc (NASDAQ: ENDP) today reported financial results for the second-quarter ended June 30, 2022.

(PRNewsfoto/Endo International plc)
(PRNewsfoto/Endo International plc)

SECOND-QUARTER FINANCIAL PERFORMANCE

(in thousands, except per share amounts)


Three Months Ended June 30,




Six Months Ended June 30,




2022


2021


Change


2022


2021


Change

Total Revenues, Net

$         569,114


$         713,830


(20) %


$      1,221,373


$      1,431,749


(15) %

Reported (Loss) Income from
Continuing Operations

$     (1,880,883)


$          (10,184)


NM


$     (1,946,183)


$           36,875


NM

Reported Diluted Weighted Average
Shares

235,117


233,331


1 %


234,498


237,043


(1) %

Reported Diluted Net (Loss) Income
per Share from Continuing Operations

$              (8.00)


$              (0.04)


NM


$              (8.30)


$                0.16


NM

Reported Net (Loss) Income

$     (1,885,427)


$          (15,500)


NM


$     (1,957,401)


$            26,024


NM

Adjusted Income from Continuing
Operations (2)(3)

$              6,532


$         147,121


(96) %


$         162,471


$          322,038


(50) %

Adjusted Diluted Weighted Average
Shares (1)(2)

236,217


235,416


— %


236,466


237,043


— %

Adjusted Diluted Net Income per
Share from Continuing Operations
(2)(3)

$                0.03


$                0.62


(95) %


$                0.69


$                1.36


(49) %

Adjusted EBITDA (2)(3)

$          160,206


$          337,700


(53) %


$          471,132


$          702,415


(33) %

__________

(1)

Reported Diluted Net (Loss) Income per Share from Continuing Operations is computed based on weighted average shares outstanding and, if there is
income from continuing operations during the period, the dilutive impact of ordinary share equivalents outstanding during the period. In the case of
Adjusted Diluted Weighted Average Shares, Adjusted Income from Continuing Operations is used in determining whether to include such dilutive impact.

(2)

The information presented in the table above includes non-GAAP financial measures such as Adjusted Income from Continuing Operations, Adjusted
Diluted Weighted Average Shares, Adjusted Diluted Net Income per Share from Continuing Operations and Adjusted EBITDA. Refer to the
"Supplemental Financial Information" section below for reconciliations of certain non-GAAP financial measures to the most directly comparable GAAP
financial measures.

(3)

Effective January 1, 2022, these non-GAAP financial measures now include acquired in-process research and development charges which were previously
excluded under our legacy non-GAAP policy. This change has been applied retrospectively to all periods presented. Refer to note (14) in the "Notes to the
Reconciliations of GAAP and Non-GAAP Financial Measures" section below for additional discussion.

 

CONSOLIDATED RESULTS

Total revenues were $569 million in second-quarter 2022, a decrease of 20% compared to $714 million in second-quarter 2021. This decrease was primarily attributable to decreased revenues from our Sterile Injectables segment, partially offset by increased revenues from our Generic Pharmaceuticals segment.

Reported loss from continuing operations in second-quarter 2022 was $1,881 million compared to $10 million in second-quarter 2021. This result was primarily due to higher asset impairment charges as well as decreased revenues and increased acquired in-process research and development charges related to the transactions announced during the quarter to acquire six sterile injectable product candidates and a Phase 3 injectable compound for the treatment of osteoarthritis knee pain. Reported diluted net loss per share from continuing operations in second-quarter 2022 was $8.00 compared to $0.04 in second-quarter 2021.

Adjusted income from continuing operations in second-quarter 2022 was $7 million compared to $147 million in second-quarter 2021. Adjusted diluted net income per share from continuing operations in second-quarter 2022 was $0.03 compared to $0.62 in second-quarter 2021. These results reflect decreased revenues and increased acquired in-process research and development charges.

BRANDED PHARMACEUTICALS SEGMENT

Second-quarter 2022 Branded Pharmaceuticals segment revenues were $219 million, a decrease of 4% compared to $228 million during second-quarter 2021.

Specialty Products revenues decreased 2% to $164 million in second-quarter 2022 compared to $167 million in second-quarter 2021, with sales of XIAFLEX® increasing 8% to $121 million compared to $111 million in second-quarter 2021. Established Products revenues decreased 10% to $55 million in second-quarter 2022 compared to $61 million in second-quarter 2021, driven primarily by ongoing generic competition.

STERILE INJECTABLES SEGMENT

Second-quarter 2022 Sterile Injectables segment revenues were $123 million, a decrease of 58% compared to $295 million during second-quarter 2021. This was primarily attributable to decreased VASOSTRICT® revenues due to lower price and market share resulting from generic competition, channel inventory destocking and lower overall market volumes as COVID-19 related hospitalizations decline.

GENERIC PHARMACEUTICALS SEGMENT

Second-quarter 2022 Generic Pharmaceuticals segment revenues were $203 million, an increase of 22% compared to $167 million during second-quarter 2021. This increase was primarily attributable to revenues from varenicline tablets, the only FDA-approved generic version of Chantix®, which launched during third-quarter 2021, partially offset by competitive pressure on certain other generic products.

INTERNATIONAL PHARMACEUTICALS SEGMENT

Second-quarter 2022 International Pharmaceuticals segment revenues were $24 million compared to $24 million during second-quarter 2021.

BALANCE SHEET, LIQUIDITY AND OTHER UPDATES

As of June 30, 2022, the Company had approximately $1.2 billion in unrestricted cash; $8.1 billion of debt; and a net debt to adjusted EBITDA ratio of 5.6. These amounts reflect the Company's payment of $35 million to acquire 6 sterile injectable product candidates and a $30 million upfront payment related to a Phase 3 injectable compound for the treatment of osteoarthritis knee pain.

Second-quarter 2022 net cash used in operating activities was $133 million compared to $155 million provided by operating activities during the second-quarter 2021. This change was primarily attributable to decreased revenues.

The Company remains in constructive negotiations with an ad hoc group of first lien creditors, among other parties. In light of the progress to date, the Company expects that these negotiations will likely result in a pre-arranged filing under Chapter 11 of the U.S. Bankruptcy Code by Endo International plc and substantially all of its subsidiaries, which could occur imminently.

Chantix® is a registered trademark of Pfizer Inc.

FINANCIAL SCHEDULES

The following table presents Endo's unaudited Total revenues, net for the three and six months ended June 30, 2022 and 2021 (dollars in thousands):


Three Months Ended June 30,


Percent
Growth


Six Months Ended June 30,


Percent
Growth


2022


2021



2022


2021


Branded Pharmaceuticals:












Specialty Products:












  XIAFLEX®

$         120,878


$         111,487


8 %


$         220,362


$         206,757


7 %

  SUPPRELIN® LA

24,739


27,568


(10) %


53,569


55,596


(4) %

  Other Specialty (1)

18,246


28,036


(35) %


38,990


48,068


(19) %

Total Specialty Products

$         163,863


$         167,091


(2) %


$         312,921


$         310,421


1 %

Established Products:












  PERCOCET®

$           26,256


$           26,156


— %


$           52,431


$           51,781


1 %

  TESTOPEL®

10,021


9,439


6 %


18,901


20,628


(8) %

  Other Established (2)

18,812


25,354


(26) %


39,560


51,845


(24) %

Total Established Products

$           55,089


$           60,949


(10) %


$         110,892


$         124,254


(11) %

Total Branded Pharmaceuticals (3)

$         218,952


$         228,040


(4) %


$         423,813


$         434,675


(2) %

Sterile Injectables:












VASOSTRICT®

$           35,630


$         197,121


(82) %


$         191,520


$         421,067


(55) %

ADRENALIN®

26,774


29,977


(11) %


60,597


59,414


2 %

Other Sterile Injectables (4)

60,767


67,502


(10) %


111,082


122,864


(10) %

Total Sterile Injectables (3)

$         123,171


$         294,600


(58) %


$         363,199


$         603,345


(40) %

Total Generic Pharmaceuticals (5)

$         203,377


$         167,272


22 %


$         389,321


$         348,145


12 %

Total International Pharmaceuticals
(6)

$           23,614


$           23,918


(1) %


$           45,040


$           45,584


(1) %

Total revenues, net

$         569,114


$         713,830


(20) %


$      1,221,373


$      1,431,749


(15) %

__________

(1)

Products included within Other Specialty include NASCOBAL® Nasal Spray, AVEED® and QWO®.

(2)

Products included within Other Established include, but are not limited to, EDEX®.

(3)

Individual products presented above represent the top two performing products in each product category for either the three or six months ended June 30,
2022 and/or any product having revenues in excess of $25 million during any completed quarterly period in 2022 or 2021.

(4)

Products included within Other Sterile Injectables include ertapenem for injection, APLISOL® and others.

(5)

The Generic Pharmaceuticals segment is comprised of a portfolio of products that are generic versions of branded products, are distributed primarily
through the same wholesalers, generally have no intellectual property protection and are sold within the U.S. During the three and six months ended June
30, 2022, varenicline tablets (our generic version of Pfizer Inc.'s Chantix®), which launched in September 2021, made up 13% and 12%, respectively, of
consolidated total revenues. No other individual product within this segment has exceeded 5% of consolidated total revenues for the periods presented.

(6)

The International Pharmaceuticals segment, which accounted for less than 5% of consolidated total revenues for each of the periods presented, includes a
variety of specialty pharmaceutical products sold outside the U.S., primarily in Canada through our operating company Paladin Labs Inc.

 

The following table presents unaudited Condensed Consolidated Statement of Operations data for the three and six months ended June 30, 2022 and 2021 (in thousands, except per share data):


Three Months Ended June 30,


Six Months Ended June 30,


2022


2021


2022


2021

TOTAL REVENUES, NET

$         569,114


$         713,830


$      1,221,373


$      1,431,749

COSTS AND EXPENSES:








Cost of revenues

263,786


318,480


537,001


623,773

Selling, general and administrative

180,830


177,619


407,991


364,793

Research and development

29,788


29,669


65,918


59,408

Acquired in-process research and development

65,000


5,000


67,900


5,000

Litigation-related and other contingencies, net

208


35,195


25,362


35,832

Asset impairment charges

1,781,063


4,929


1,801,016


8,238

Acquisition-related and integration items, net

1,825


97


448


(4,925)

Interest expense, net

139,784


141,553


274,733


275,894

Loss on extinguishment of debt




13,753

Other (income) expense, net

(19,438)


372


(18,149)


1,284

(LOSS) INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAX

$    (1,873,732)


$                 916


$    (1,940,847)


$           48,699

INCOME TAX EXPENSE

7,151


11,100


5,336


11,824

(LOSS) INCOME FROM CONTINUING OPERATIONS

$    (1,880,883)


$          (10,184)


$    (1,946,183)


$           36,875

DISCONTINUED OPERATIONS, NET OF TAX

(4,544)


(5,316)


(11,218)


(10,851)

NET (LOSS) INCOME

$    (1,885,427)


$          (15,500)


$    (1,957,401)


$           26,024

NET (LOSS) INCOME PER SHARE—BASIC:








Continuing operations

$              (8.00)


$              (0.04)


$              (8.30)


$                0.16

Discontinued operations

(0.02)


(0.03)


(0.05)


(0.05)

Basic

$              (8.02)


$              (0.07)


$              (8.35)


$                0.11

NET (LOSS) INCOME PER SHARE—DILUTED:








Continuing operations

$              (8.00)


$              (0.04)


$              (8.30)


$                0.16

Discontinued operations

(0.02)


(0.03)


(0.05)


(0.05)

Diluted

$              (8.02)


$              (0.07)


$              (8.35)


$                0.11

WEIGHTED AVERAGE SHARES:








Basic

235,117


233,331


234,498


231,941

Diluted

235,117


233,331


234,498


237,043

 

 

The following table presents unaudited Condensed Consolidated Balance Sheet data at June 30, 2022 and December 31, 2021 (in thousands):


June 30, 2022


December 31,
2021

ASSETS




CURRENT ASSETS:




Cash and cash equivalents

$      1,191,572


$      1,507,196

Restricted cash and cash equivalents

113,493


124,114

Accounts receivable

491,492


592,019

Inventories, net

287,756


283,552

Assets held for sale

11,080


Other current assets

104,511


207,705

  Total current assets

$      2,199,904


$      2,714,586

TOTAL NON-CURRENT ASSETS

4,162,358


6,052,829

TOTAL ASSETS

$      6,362,262


$      8,767,415

LIABILITIES AND SHAREHOLDERS' DEFICIT




CURRENT LIABILITIES:




Accounts payable and accrued expenses, including legal settlement accruals

$      1,140,654


$      1,417,892

Other current liabilities

41,018


212,070

  Total current liabilities

$      1,181,672


$      1,629,962

LONG-TERM DEBT, LESS CURRENT PORTION, NET

8,039,178


8,048,980

OTHER LIABILITIES

339,484


332,459

SHAREHOLDERS' DEFICIT

(3,198,072)


(1,243,986)

TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT

$      6,362,262


$      8,767,415

 

 

The following table presents unaudited Condensed Consolidated Statement of Cash Flow data for the six months ended June 30, 2022 and 2021 (in thousands):


Six Months Ended June 30,


2022


2021

OPERATING ACTIVITIES:




Net (loss) income

$    (1,957,401)


$           26,024

Adjustments to reconcile Net (loss) income to Net cash provided by operating activities:




Depreciation and amortization

206,224


237,703

Asset impairment charges

1,801,016


8,238

Other, including cash payments to claimants from Qualified Settlement Funds

18,064


126,851

Net cash provided by operating activities

$           67,903


$         398,816

INVESTING ACTIVITIES:




Capital expenditures, excluding capitalized interest

$          (47,559)


$          (41,345)

Acquisitions, including in-process research and development, net of cash and restricted
cash acquired

(89,520)


Proceeds from sale of business and other assets, net

21,133


1,343

Other

...