Endo touts financial 'flexibility' as massive opioid settlements mount industrywide

Amid a leadership change, Endo expects to stay the course on its strategic vision and opioid litigation. (Endo)

Endo is in a period of transition, with its CEO hitting the exit and a new round of opioid lawsuits expected to hit the courtroom in the coming months. With the industry favoring massive opioid settlements—and, increasingly, bankruptcy—Endo's new leader thinks the drugmaker has the formula to weather the storm.

Endo Chief Financial Officer Blaise Coleman, expected to take over departing chief Paul Campanelli's role in the coming months, touted the drugmaker's financial "flexibility" as leverage in its ongoing opioid litigation after other drugmakers have floated massive settlements involving windfalls of cash, bankruptcy proceedings or, often, both. 

In a fourth-quarter earnings call with analysts Wednesday, Coleman said he expected to stay the course on Endo's opioid plan with $1.5 billion in cash reserves on hand at year-end. 


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"We know what our strategy is, we feel good about our flexibility to deal with that and that’s exactly how we’re going to move forward," Coleman said. 

RELATED: Mallinckrodt floats $1.6B opioid deal, bankruptcy for specialty generics unit

On the whole, Endo tread water in 2019 with a 3% decline in total revenue to $765 million. That rake actually outshot Street consensus by around $30 million, putting Endo on slightly better footing heading into Coleman's tenure. 

Endo's outperformance was "indicative of a company that continues to execute in a really challenging environment," RBC Capital Markets analyst Randall Stanicky said.

RELATED: Endo replaces CEO, appoints M&A specialist to board in possible push for deals

Endo said in November that Campanelli, an experienced executive tasked in 2016 with turning the floundering drugmaker around, would step into the executive chairman role. 

Earlier this month, Endo tapped Coleman, a five-year veteran of the company, as Campanelli's replacement, also bringing on Mark Barberio, of business and M&A consulting firm Markapital, to its board of directors. Barberio previously worked as co-CEO and CFO for Mark IV, a global manufacturing firm, Endo said. 

Coleman's elevation and Barberio's arrival seemed to portend that Endo might be in the market for transactions despite the company's "history of conservatism," Stanicky said.  However, Coleman was mostly mum on any upcoming strategic shifts, saying the company engaged in periodic strategic reviews in a "cadence" that would remain in place under his leadership.

"As we move forward and make those assessments, if there’s anything that needs to be changed, we’ll communicate that," Coleman said. "Our focus right now is about our 2020 priorities––there’s nothing more important for the future of our company."

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