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Endo (ENDP) Gains on Deal to Acquire BioSpecifics for $540M

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Shares of Endo International plc gained 13.25% after it announced that it will acquire commercial-stage biopharmaceutical company, BioSpecifics Technologies Corp. for $88.50 in cash per share, or an estimated enterprise value of approximately $540 million.

The total value of $540 million was the net of approximately $120 million in cash acquired at the anticipated time of deal closure.

We remind investors that Endo has a strategic relationship with BioSpecifics since 2004, whereby the latter receives a royalty stream from the former.

The royalty is related to Endo's collagenase-based therapies, which currently include Xiaflex indicated for the treatment of Dupuytren's contracture and Peyronie's disease, and the recently approved Qwo, an injectable treatment for cellulite. Qwo is expected to be     launched next year.

The transaction is expected to close in late 2020.

Endo expects the acquisition to enable it to reap benefits through additional investment in the significant long-term growth potential of both Xiaflex and Qwo.

Shares of BioSpecifics Technologies were up 44.7% on the news as the price of $88.50 per share in cash was much higher than the closing price $61.02 as of Oct 16.

Shares of Endo have gained 21.9% in the year so far against the industry’s 7% decline.

Endo’s efforts to revive its business are encouraging and should yield results. Xiaflex’s performance has been solid on higher demand for both Peyronie's disease and Dupuytren's contracture. The Sterile Injectables segment continues to gain traction, driven by strong growth in Vasostrict and Adrenalin.
It recently entered into a non-exclusive manufacturing agreement with Novavax, Inc. (NVAX - Free Report) for the latter’s COVID-19 vaccine candidate, NVX-CoV2373.

Endo currently carries a Zacks Rank # 2 (Buy). Another similar-ranked stock in the biotech space is Vertex Pharmaceuticals (VRTX - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Vertex’s earnings estimates grew 13 cents for 2020 and 18 cents for 2021 in the past 30 days.

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