HealthTronics, Inc. - a subsidiary of
) - intends to sell its anatomical pathology business
(HealthTronics Laboratory Solutions). To achieve this objective,
it inked a deal with the privately-held biotechnology company,
Metamark Genetics, Inc. The value of the deal was not
Endo Health intends to optimize its resources and maximize
long-term growth potential through this move. We remind investors
that in Jun 2013, Endo Health had announced that it is exploring
options regarding its struggling HealthTronics (services)
Through the segment, Endo Health currently focuses on
providing urological services, products and support systems to
multiple healthcare providers in the U.S. The offerings were
added to Endo Health's portfolio following its acquisition of
HealthTronics in 2010. The company further stated that it intends
to work on driving growth at its other three segments -
Qualitest, Branded Pharmaceuticals and American Medical
At that time, Endo Health had also announced that it will trim
its work-force by approximately 15%. The move is expected to
result in annual savings of approximately $325 million.
We note that the below-par sales of the HealthTronics unit is
not the only concern currently facing Endo Health. The threat of
genericization looms large over Endo Health. Recently, Endo
Health's revenues in the second quarter of 2013 declined on a
year-over-year basis due to lower sales of painkiller Opana ER.
Opana ER sales were hurt by generic competition during the second
We note that another painkiller at Endo Health, Lidoderm will
be facing generic competition from
) shortly. In Aug 2012, the U.S. Food and Drug Administration
cleared Actavis' generic version of Lidoderm. However, Actavis'
agreement with Endo Health prohibits the former from selling the
drug prior to Sep 15, 2013.
Endo Health currently carries a Zacks Rank #3 (Hold).
Currently, companies like
Gilead Sciences, Inc.
) look attractive, each with a Zacks Rank #1 (Strong Buy).
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