Disappointed shareholder Fidelity agitates for Endo sale

The Lidoderm patch loses exclusivity in September.--Courtesy of Endo Health Solutions

If Endo Health Solutions ($ENDP) sells, you can credit--or blame--Fidelity Investments. That's according to Bloomberg sources, who say Fidelity is pressuring the board to make a deal. The time is right, Fidelity figures, because the company is searching for a new CEO anyway. Current CEO David P. Holveck said in December that he'd retire as soon as a successor is named.

With a 12%-plus stake, Fidelity is Endo's top shareholder--and it's been frustrated by Endo's recent shortfalls in sales and earnings. Not to mention Endo's slide in the market; its stock plummeted by 24% last year, Bloomberg points out. When news of a possible buyout surfaced, the shares leapt by the most in four years.

David. P Holveck

Besides twisting arms on the board, Fidelity has been contacting potential buyers, including Warner Chilcott ($WCRX), another drug company in which Fidelity has a stake, Bloomberg says. According to a report from Reuters last week, Valeant Pharmaceuticals ($VRX) has also had conversations with Endo. Some have even mentioned Endo as a possible buyout for the deal-needy AstraZeneca ($AZN).

There's a reason why Endo's stock is way down. Its best-selling product, the Lidoderm patch, loses exclusivity in September. Its opioid pill Opana ER faces generic competition as well, and Endo's attempts to hold it off at FDA have fallen flat. Manufacturing problems unit have triggered a series of recalls.

Opana's prospects could be improved if FDA decides to require opioid makers to sell only tamper-resistant formulas, but the agency is only just holding hearings on the prospect.

- see the Bloomberg story

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