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Needham & Company on Endo Pharmaceuticals (ENDP): Watson (WPI) Gains First Generic Lidoderm Approval; A Few Other Issues Too

August 24, 2012 7:59 AM EDT
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Price: $0.29 --0%

Rating Summary:
    14 Buy, 15 Hold, 5 Sell

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Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
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Needham & Company maintains a 'Hold' on Endo Pharmaceuticals (NASDAQ: ENDP).

Analyst, Elliott Wilbur, said, "After years of back and forth debate in the public arena, Watson Pharmaceutical (NYSE: WPI)(Hold) has won the credibility battle on generic Lidoderm, receiving final FDA approval for its first-to-file ANDA. Pursuant to a settlement with ENDP in May 2012, WPI is precluded from launching its generic until Sep. 2013 and then must pay ENDP 25% of gross profit until another generic is on the market, from either ENDP itself in the form of an authorized generic or from another generic filer which in this case would be Mylan (NYSE: MYL)(Strong Buy). The optimal math under this equation, in our view, has ENDP not launching an authorized generic product and simply collecting the royalty from WPI until the next entrant emerges."

Two other points of interest: 1) Consideration that Impax (Nasdaq: IPXL)(Hold-rated) could enter the market with generic Opana ER in Jan '13; and 2) Needham is increasingly of the view that ENDP could have been the mystery bidder for Par Pharma (NYSE: PRX)(Hold-rated), but the second round was ultimately trumped by Private Equity firm TPG.

For an analyst ratings summary and ratings history on Endo Pharmaceuticals click here. For more ratings news on Endo Pharmaceuticals click here.

Shares of Endo Pharmaceuticals closed at $31.88 yesterday.


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