Endo Health Solutions Inc.
) recently suffered a setback with the US Food and Drug
Administration (FDA) turning down its request to prevent the
entry of generic versions of the company's painkiller Opana ER.
We remind investors that Endo had filed a Citizen Petition (CP)
with the FDA in 2012. Through the CP, the company had sought a
formal determination whether the original version (non-tamper
resistant) of the drug was voluntarily removed from the market in
2012 for safety reasons (involving its abuse).
We remind investors that the new formulation of Opana ER, which
is designed to resist attempts of crushing, breaking, pulverizing
or making a powder of the product, was approved by the FDA in
Through the CP, Endo had requested the FDA not to clear
non-tamper resistant generic versions of the painkiller. Endo had
also requested the FDA to suspend the approvals of the currently
available generic versions of the painkiller.
However, the FDA turned down Endo's CP. 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.
The FDA also declined to approve Endo's supplemental new drug
application (sNDA) regarding Opana ER in the current form and
issued a complete response. Through the sNDA, Endo was seeking a
modification in the label of the drug to describe its
Endo expects the FDA decision to impact its 2013 guidance
adversely. While issuing the 2013 guidance in Jan 2013, Endo had
assumed that the generic versions of its painkiller would be
removed from the market by the FDA by mid-2013. The FDA decision
would however further intensify the generic competition for Opana
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 a couple of
days back, Endo had stated that it expects adjusted earnings per
share for 2013 in the range of $4.40-$4.70 per share and revenues
in the range of $2.80-$2.95 billion. The Zacks Consensus Estimate
for 2013 pegs earnings at $4.52 per share on revenues of $2.89
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With the FDA rejecting its CP on Opana ER, Endo intends to throw
more light regarding its 2013 guidance in the coming months.
Endo currently carries a Zacks Rank #3 (Hold). Companies such as
Cubist Pharmaceuticals Inc.
) appear to be more attractive with a Zacks Rank #2