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Endo International plc beats on both earnings and sales in the second quarter as the Sterile injectables segment performed impressively.
The company’s earnings of 65 cents easily beat the Zacks Consensus Estimate of 35 cents in the reported quarter and rose from the year-ago quarter’s 60 cents.
Revenues came in at $687.6 million in the quarter, surpassing the Zacks Consensus Estimate of $638 million but decreasing 2% from the year-ago quarter. The decline was attributed to lower Branded Pharmaceuticals segment revenues due to reduced physician office activity and patient visits compared to the prior-year quarter because of the COVID-19 pandemic. The decrease was partially offset by an increase in Sterile Injectables segment revenues due to significant channel inventory stocking of products used to treat certain patients infected with COVID-19.
Quarterly Highlights
Endo has four reportable business segments — Branded Pharmaceuticals, Generic Pharmaceuticals, Sterile Injectables and International Pharmaceuticals.
Branded Pharmaceuticals revenues were $129.5 million, down 38% year over year due to reduced volumes caused by the COVID-19 pandemic.
Specialty Products revenues decreased 45% to $68.7 million. Sales of Xiaflex decreased 55% to $33.8 million as a result of physician office closures and a decline in patients electing to be treated because of the COVID-19 pandemic. Established Products revenues decreased 28% to $60.8 million due to competitive pressures and a temporary product supply disruption, which has been resolved.
Last month, the FDA approved QWO (collagenase clostridium histolyticum-aaes) for the treatment of moderate-to-severe cellulite in the buttocks of adult women. QWO is the first FDA-approved injectable treatment for cellulite and expected to be available throughout the United States beginning spring 2021.
Sterile Injectables revenues came in at $319 million, up 31% year over year, driven by significant channel inventory stocking of Vasostrict in anticipation of treating vasodilatory shock in patients infected with COVID-19.
Generic Pharmaceuticals reported sales of $216 million in the quarter, down 1% due to continued competitive pressures on certain key products, which were partially offset by recent product launches.
International Pharmaceuticals revenues came in at $23 million, down 20% year over year.
2020 Guidance
Revenues in the third quarter are projected to be $515-$550 million. Adjusted earnings per share are estimated to be 8-13 cents.
Revenues in 2020 are projected to be $2.60-$2.70 billion. Adjusted earnings per share are estimated to be $2-$2.15.
Our Take
Endo reported better-than-expected results for the second quarter as the Branded Pharmaceuticals segment performed better than expected as COVID-19-related restrictions and physician office closures began easing throughout the quarter. Moreover, the Sterile Injectables segment delivered strong revenue growth as customers built significant inventories of products used to treat certain COVID-19 patients. The recent FDA approval of QWO has strengthened the company’s portfolio.
Shares of Endo have lost 23% in the year so far compared with the industry’s 4.6% decline.
However, revenues declined year over year. It remains to be seen how the pandemic impacts the business further.
The pandemic has created an uncertain environment even though some companies are witnessing early signs of recovery.
Endo’s efforts to revive its business are encouraging after its generics business plummeted due to product discontinuations and pricing pressure from increased competition. We note that the company’s major competitors in this space include Mylan and Teva, among others.
Dr. Reddy’s earnings per share estimates have risen from $1.84 to $1.93 for 2020 and from $2.11 to $2.17 for 2021 over the past 60 days.
Supernus’ earnings per share estimates have risen from $1.44 to $1.49 for 2020 and from $1.66 to $1.82 for 2021 over the past 30 days.
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Image: Bigstock
Endo (ENDP) Q2 Earnings & Sales Beat as Coronavirus Impacts Ease
Endo International plc beats on both earnings and sales in the second quarter as the Sterile injectables segment performed impressively.
The company’s earnings of 65 cents easily beat the Zacks Consensus Estimate of 35 cents in the reported quarter and rose from the year-ago quarter’s 60 cents.
Revenues came in at $687.6 million in the quarter, surpassing the Zacks Consensus Estimate of $638 million but decreasing 2% from the year-ago quarter. The decline was attributed to lower Branded Pharmaceuticals segment revenues due to reduced physician office activity and patient visits compared to the prior-year quarter because of the COVID-19 pandemic. The decrease was partially offset by an increase in Sterile Injectables segment revenues due to significant channel inventory stocking of products used to treat certain patients infected with COVID-19.
Quarterly Highlights
Endo has four reportable business segments — Branded Pharmaceuticals, Generic Pharmaceuticals, Sterile Injectables and International Pharmaceuticals.
Branded Pharmaceuticals revenues were $129.5 million, down 38% year over year due to reduced volumes caused by the COVID-19 pandemic.
Specialty Products revenues decreased 45% to $68.7 million. Sales of Xiaflex decreased 55% to $33.8 million as a result of physician office closures and a decline in patients electing to be treated because of the COVID-19 pandemic. Established Products revenues decreased 28% to $60.8 million due to competitive pressures and a temporary product supply disruption, which has been resolved.
Last month, the FDA approved QWO (collagenase clostridium histolyticum-aaes) for the treatment of moderate-to-severe cellulite in the buttocks of adult women. QWO is the first FDA-approved injectable treatment for cellulite and expected to be available throughout the United States beginning spring 2021.
Sterile Injectables revenues came in at $319 million, up 31% year over year, driven by significant channel inventory stocking of Vasostrict in anticipation of treating vasodilatory shock in patients infected with COVID-19.
Generic Pharmaceuticals reported sales of $216 million in the quarter, down 1% due to continued competitive pressures on certain key products, which were partially offset by recent product launches.
International Pharmaceuticals revenues came in at $23 million, down 20% year over year.
2020 Guidance
Revenues in the third quarter are projected to be $515-$550 million. Adjusted earnings per share are estimated to be 8-13 cents.
Revenues in 2020 are projected to be $2.60-$2.70 billion. Adjusted earnings per share are estimated to be $2-$2.15.
Our Take
Endo reported better-than-expected results for the second quarter as the Branded Pharmaceuticals segment performed better than expected as COVID-19-related restrictions and physician office closures began easing throughout the quarter. Moreover, the Sterile Injectables segment delivered strong revenue growth as customers built significant inventories of products used to treat certain COVID-19 patients. The recent FDA approval of QWO has strengthened the company’s portfolio.
Shares of Endo have lost 23% in the year so far compared with the industry’s 4.6% decline.
However, revenues declined year over year. It remains to be seen how the pandemic impacts the business further.
The pandemic has created an uncertain environment even though some companies are witnessing early signs of recovery.
Endo’s efforts to revive its business are encouraging after its generics business plummeted due to product discontinuations and pricing pressure from increased competition. We note that the company’s major competitors in this space include Mylan and Teva, among others.
Zacks Rank & Stocks to Consider
Endo currently carries a Zacks Rank # 3 (Hold). A couple of better-ranked stocks in the healthcare space are Dr. Reddys Laboratories Ltd (RDY - Free Report) and Supernus Pharmaceuticals, Inc. (SUPN - Free Report) . Both carry a Zacks Rank #2 (Buy). 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 $1.84 to $1.93 for 2020 and from $2.11 to $2.17 for 2021 over the past 60 days.
Supernus’ earnings per share estimates have risen from $1.44 to $1.49 for 2020 and from $1.66 to $1.82 for 2021 over the past 30 days.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>