Endo Reports First-Quarter 2017 Financial Results

Endo International has reported first-quarter 2017 financial results.

Total revenues increased by 8 percent to $1,038 million in first-quarter 2017 compared to the same period in 2016. This increase resulted primarily from the fourth-quarter 2016 introductions of key first-to-file generic products, quetiapine extended-release (ER) tablets and ezetimibe tablets. GAAP net loss from continuing operations in first-quarter 2017 was $165 million compared to GAAP net loss from continuing operations of $89 million during the same period in 2016 primarily attributable to the after-tax impact of goodwill and intangible asset impairment charges during first-quarter 2017 compared to the same period last year. GAAP net loss per share from continuing operations for the first-quarter 2017 was $0.74, compared to GAAP net loss per share from continuing operations of $0.40 in first-quarter 2016.

"During Endo's February 2017 earnings call, we outlined key priorities that we believe will enable us to achieve our Company's vision. As we noted, we expect this to take time, but our strong first-quarter performance illustrates how our renewed focus on execution is beginning to yield results. The quarter benefited from new Generic product introductions and continued strong growth from our Branded Specialty products business," Paul Campanelli, President and CEO of Endo said. "As a result, we generated substantial adjusted EBITDA in the quarter that was further enhanced by cost savings from our 2016 and 2017 restructurings and related initiatives."

Adjusted net income from continuing operations in first-quarter 2017 increased by 14 percent to $275 million compared to first-quarter 2016, driven primarily by the contributions of ezetimibe, quetiapine ER, Sterile Injectables, and the company’s Branded Specialty products. Adjusted net income per share from continuing operations for the three months ended March 31, 2017 increased 14 percent to $1.23 compared to first-quarter 2016.

During first-quarter 2017, the U.S. Generic Pharmaceuticals segment submitted four regulatory filings and launched four new products, including ephedrine sulfate injection following the approval of its New Drug Application by the U.S. Food and Drug Administration (FDA).

First-quarter 2017 U.S. Generic Pharmaceuticals results include revenues of $722 million, a 24 percent increase compared to first-quarter 2016; this increase was primarily attributable to the fourth-quarter 2016 introductions of quetiapine ER tablets, the generic version of Seroquel XR, and ezetimibe tablets, the generic equivalent of Zetia. Par has first-to-file status and associated marketing exclusivity for each product. Revenue growth also benefited from the launch of ephedrine sulfate injection.

Sterile Injectables increased 22 percent compared to first-quarter 2016; this increase was driven primarily by Vasostrict and Adrenalin.

Generics base business decreased 32 percent compared to first-quarter 2016; this decrease primarily resulted from the impact on first-quarter 2017 related to 2016 competitive events and previously announced product discontinuances.

During first-quarter 2017, highly statistically significant data from Endo's Phase 2b study of Xiaflex in patients with cellulite was presented at the Aesthetica Super Symposium (American Society of Plastic Surgeons) and the American Academy of Dermatology Annual Meeting. Phase 3 clinical trials are expected to begin in the second half of 2017.

On March 14, 2017, the FDA's Advisory Committees voted 18 to eight, with one abstention, that the benefits of reformulated Opana ER no longer outweigh its risks, while a number of the Committee members expressed their preference that Opana ER remain on the market with additional regulatory restrictions. Following the outcome of the FDA advisory committee meetings, the company stated its belief that O Opana ER remains an important clinical choice for appropriate patients and that Endo plans to work collaboratively with the FDA as it completes its product evaluation.

First-quarter 2017 U.S. Branded Pharmaceuticals results include revenues of $250 million, a 19 percent decrease compared to first-quarter 2016; this decrease was primarily attributable to generic erosion adversely impacting the Company's established products portfolio, including Voltaren Gel, Frova, Opana ER and Lidoderm, along with the divestiture of Stendra.

Specialty products increased 11 percent in the first-quarter 2017 versus the same period in 2016, driven by the strong performance from Xiaflex and Supprelin LA. Sales of Xiaflex, our flagship Branded product, increased 12 percent compared to first-quarter 2016; this increase was primarily attributable to strong demand growth.