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Endo (ENDP) Beats on Q1 Earnings, Guides Weak Q2 Results

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Endo International plc’s (ENDP - Free Report) first-quarter earnings of 66 cents per share beat the Zacks Consensus Estimate of 44 cents but declined from 73 cents in the year-ago quarter.

Revenues came in at $652 million in the first quarter, surpassing the Zacks Consensus Estimate of $641 million.  However, revenues were down 9% from the year-ago quarter due to decreased revenues from its Sterile Injectables segment, partially offset by increased revenues from its Generic Pharmaceuticals segment and the Specialty Products portfolio of its Branded Pharmaceuticals segment.

Endo has lost 46.3% in the year so far compared with the industry’s 22.5% decline. Shares are down 35.6% in pre-market trading, most likely due to the disappointing guidance.

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Quarterly Highlights

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

Branded Pharmaceuticals’ revenues were $205 million, down 1% from the year-ago quarter. Within the segment, Specialty Products revenues increased 4% to $149 million. Sales of Xiaflex increased 4% to $99 million. However, Established Products revenues decreased 12% to $56 million due to ongoing generic competition.

Sterile Injectables’ revenues came in at $240 million, down 22% year over year on decreased Vasostrict revenues due to generic competition and lower overall demand as COVID-19 related hospitalizations decline.

Generic Pharmaceuticals reported sales of $186 million in the quarter, up 3%. The rise was primarily attributable to revenues from varenicline tablets, the only FDA-approved generic version of Chantix, which was launched during third-quarter 2021, partially offset by competitive pressure on certain other generic products.

International Pharmaceuticals revenues came in at $21 million, down from $22 million.

Q2 2022 Guidance

Endo provided financial guidance only for the second quarter due to uncertainties in certain key assumptions. Revenues for the second quarter are projected to be $500-$525 million. Adjusted loss per share is estimated at 17 cents to 15 cents.

Our Take

Endo reported better-than-expected results in the first quarter. However, the guidance for the second quarter was disappointing due to challenging market dynamics for Vasostrict.

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

Earlier in the month, Endo acquired six development-stage, ready-to-use injectable product candidates from Nevakar Injectables Inc., a subsidiary of Nevakar, Inc, for $35 million.

Zacks Rank & Stocks to Consider

Endo currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the biotech sector are Clovis Oncology (CLVS - Free Report) , Vertex Pharmaceuticals Incorporated (VRTX - Free Report) and Alkermes (ALKS - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Clovis has a mixed track record, having topped earnings estimates in two of the last four quarters and missing in the remaining two. Clovis pulled off a four-quarter earnings surprise of 1.44%, on average.

The consensus estimate for Vertex’s 2022 earnings has increased 25 cents over the past 60 days to $14.58. Shares of VRTX have gained 17.5% in the year so far.

Loss estimates for ALKS for 2022 have narrowed to 3 cents from a loss of 14 cents in the past 60 days. Alkermes surpassed estimates in all of the trailing four quarters, the average surprise being 350.48%.