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Endo Health Solutions (ENDP - Analyst Report) recently announced that the transition of the company's Opana ER franchise to the new version, which is designed to be crush resistant, is complete. The new version of the painkiller aims to bring relief to patients suffering from moderate-to-severe pain and in need of continuous opioid treatment for an extended period of time.

Following the completion of the transition, the US Food and Drug Administration (FDA) moved all the dosages of the old formulation of the painkiller to the discontinued list of its Orange Book.

We remind investors that the FDA approved the new formulation of Opana ER in December 2011. The path for US approval of the new formulation of Opana ER was anything but smooth. In January 2011, the FDA had issued a complete response letter (CRL) for the painkiller. Even though the US regulatory body declined to approve the new formulation of Opana ER at that time, the agency did not ask for additional studies to be conducted.

We believe that the completion of the transition of Endo Health Solutions’ Opana ER franchise to the new version is a positive for the company’s pain franchise as a generic threat looms over the pain portfolio at Endo. Endo’s lead pain drug Lidoderm is slated to go off patent in 2015. Other key players in the pain market include Pfizer (PFE - Analyst Report) and Teva Pharmaceutical Industries Ltd. (TEVA - Analyst Report).

We note that Endo has made several key acquisitions since 2010 to bolster its product portfolio and pipeline to combat the generic threat. In June 2011, the company purchased American Medical Systems, a leading pelvic-health devices provider. In December 2010, Endo acquired generic company Qualitest Pharmaceuticals. During the same year, Endo also bought Penwest Pharmaceuticals Co. and HealthTronics Inc. The acquisitions significantly diversified the company’s operations.

The company changed its name to Endo Health Solutions from Endo Pharmaceuticals Holdings in May 2012 to accurately reflect its diversified operations.

Our Recommendation

We have a Neutral stance on Endo Health Solutions. The stock carries a Zacks #3 Rank (Hold rating) in the short run.

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