Struggling Endo's write-downs pass $5B for 2017 thanks to Opana, mesh, restructuring

endo
Endo surpassed Wall Street's Q2 estimates despite its recent struggles, but big write-downs will be a drag on the year.

Back in February, Endo took a whopping $3.5 billion write-downbut that wouldn’t be it for the year.

On Tuesday, the company reported $725 million in impairment charges, thanks largely to the restructuring of its manufacturing network and its pulling of pain med Opana ER from the market.

And that announcement came just one day after the Dublin drugmaker said it would raise by $775 million the amount it’s paying to wrap up the vaginal mesh saga that has been plaguing it for years. Between this year’s Q4 and the end of 2019, it’ll make settlement payments expected to cover about 22,000 U.S. liability claims, as well as all the international claims it’s aware of.

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RELATED: Struggling Endo takes $3.5B body blow as generics pricing heads south

All in all, it’s been an expensive year for Endo, which has struggled in the face of executive turnover, industry-wide generics pricing pressure and more. The FDA’s June request that Endo nix long-acting opioid Opanaa $160 million seller thrust into the spotlight by the opioid addiction crisisdidn’t help.

The company did manage to record a street-beating Q2, though, triumphing in the face of low expectations. Notably, the “strength came ... on the back of a beat in generics,” which generated $563 million versus analyst forecasts of $525 million, RBC Capital Markets analyst Randall Stanicky pointed out in a note to clients.

RELATED: FDA tells Endo to remove Opana ER from the market

Still, “the reality is cash flow generation toward continued paydown of debt/mesh will remain the primary focus in the stock over the near-term,” he said.

Meanwhile, opioids continue to face scrutiny from all sides, with a U.S. cost watchdog taking aim Tuesday. The Institute for Clinical and Economic Review (ICER) published its final report on the effectiveness and value of abuse-deterrent versions of the highly addictive meds, determining that the safer products needed an average 41% discount to make them “cost-neutral” with their predecessors.

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