Mizuho Securities Reiterates Outperform Following Endo Int'l (ENDP) Sell-Side Meeting
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Mizuho Securities reiterated an Outperform rating and $29.00 price target on Endo International plc (NASDAQ: ENDP) following a sell-side meeting with management. The company's CEO, Paul Campanelli indicated that there should be a business update in February following its Board meeting.
Analyst Irina Koffler commented, "Mgmt hosted a sell-side meeting at its Par facility which included a plant tour. Our takeaways from the visit are as follow: (1) Mgmt is still assessing how to optimize the business and will then consider the optimal capital structure it will require. CEO Paul Campanelli indicated that there should be a business update in Feb following its Board meeting. (2) Mgmt plans to eliminate redundant functions, consolidate its CT patch facility, and further streamline the business, which we view favorably. (3) The opioid business and it's former therapeutic focus on pain was downplayed, since opioid dynamics have gotten significantly more competitive. Mgmt no longer views this segment as a growth driver. We would not be surprised if Endo stopped promoting its pain drugs altogether and even exited its Belbuca partnership (since it referred to the product as disappointing and would not commit to earlier forecasts). (4) The company appears to be ready to launch both Seroquel and Zetia generics. (5) We think there could be some smaller amount of additional accruals for the last remaining 8000 mesh liability cases though mgmt indicated that a large component of these cases are low value or potentially fraudulent. (6) Xiaflex was called out as a critical product that it does not plan to divest but noted that it is actively evaluating its international businesses and other brands. Our overall view that the company can divest assets to de-lever and then itself get consolidated, remains unchanged."
Shares of Endo International plc closed at $22.36 yesterday.
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