Endo’s new CEO is making his presence felt—and 375 employees are feeling the consequences.
The company is sidelining its long-core pain business, eliminating the U.S. branded field corps that promoted its leading drugs. Those full-time workers, contract reps and internal support staffers will all get the ax, the company said Thursday.
One catalyst? Endo is bailing on its partner, BioDelivery Sciences, and handing back newly launched inside-the-cheek pain film Belbuca. Another is a bigger issue: The controversy surrounding opioid painkillers, which are among Endo's top-selling pain meds.
After pulling out of the BioDelivery deal, Endo will be left with a pain portfolio comprising only “established” products that no longer need promotion, the company said. Opana, for instance, once among Endo's top sellers, has shrunk due to generic competition, and the company abandoned an effort to keep the brand humming by winning an "abuse-deterrent" tag on its FDA label.
Instead, Endo will focus its efforts—and a “substantial portion” of the $90 million to $100 million in pre-tax costs it expects to save next year—on its “core franchises,” including Xiaflex, a penis curvature drug the company acquired in its $2.6 billion Auxilium buyout. It's now developing the med as a treatment for cellulite.
It’s a big shift for Endo, which made its name in the pain field with products such as Opana and Lidoderm. But since inking the Belbuca pact in 2012, “the opioid market and Endo’s strategic priorities have evolved,” Endo skipper Paul Campanelli said in a statement. “The product no longer aligns with Endo’s U.S. branded segment strategy and our focus on core assets.”
Belbuca may not be the only treatment the struggling Endo casts off in the coming months, either. The Dublin drugmaker is continuing its “product-by-product portfolio assessment,” Campanelli said, and asset sales have been a topic of conversation with investors since June.
The way some analysts see it, change can only be a good thing for Endo. “We view the stock as toxic,” Mizuho analyst Irina Koffler wrote after the company’s guidance took a beating in May, adding that she “can't see a reason” to own Endo shares.
Since then, though, the company has already begun making some edits, not the least of which has been to its executive ranks. Campanelli, the former CEO of Endo acquisition Par Pharmaceuticals, took over for helmsman Rajiv De Silva in September, and the following month, company CFO Suketu Upadhyay took off for a “senior-level finance position” at a different biopharma player.