The US Food and Drug Administration (FDA) recently issued a
complete response letter (CRL) for
Endo Health Solutions
) new drug application on Aveed. The company is looking to get
Aveed (a long-acting testosterone undecanoate injection) approved
as a treatment for male hypogonadism.
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The FDA declined to approve the new drug application for Aveed in
the present form, as it is apprehensive about the risks and
complications which may emanate after the injection of the drug.
While issuing the CRL, the US regulatory body asked Endo to
develop a medication guide. Specifically, the FDA asked
Endo to ensure that the Risk Evaluation and Mitigation Strategy
includes the guide in addition to Elements to Assure Safe Use to
address the safety issue mentioned above.
However, the US regulatory body did not ask the company to
conduct additional studies on Aveed. The requirement of
additional trials would have pushed up its research and
development costs. Endo intends to respond to the CRL by the end
of the third quarter of 2013.
We note that the Aveed setback is not the first one for Endo this
year. Last month, Endo suffered a blow with the FDA turning down
its request to prevent the entry of generic versions of its
painkiller, Opana ER. The decision by the FDA implies that the
generic formulations of the original version of Opana ER will
continue to be available in the market.
Endo expects the FDA decision to impact its 2013 guidance
adversely. The company expects the adverse FDA ruling to reduce
2013 total net sales of Opana ER by up to $120 million. Moreover,
Endo's 2013 adjusted earnings per share outlook is expected to be
hurt by approximately 55 cents following the FDA verdict.
While announcing its first-quarter 2013 results, Endo stated that
it expects adjusted earnings per share for 2013 in the range of
$4.40-$4.70 per share and revenues of $2.80-$2.95 billion. The
Zacks Consensus Estimate for 2013 pegs earnings at $4.31 per
share on revenues of $2.8 billion. Endo intends to throw more
light on its 2013 guidance in the coming months.
Moreover, another painkiller at Endo, Lidoderm is expected to
face generic competition later in the year from
). This will hamper sales of the drug significantly.
Endo currently carries a Zacks Rank #3 (Hold).
) appear to be more attractive with a Zacks Rank #1 (Strong Buy)