Endo Health Solutions' ($ENDP) is feeling the generics pain this year as its key products face copycats and that may be enough to have sent it looking for a buyer.
Reuters, citing unnamed sources, says the pain drug specialist in recent weeks has had conversations with potential suitors, including Warner Chilcott ($WCRX) and serial buyer Valeant Pharmaceuticals International ($VRX). The news service said the talks are preliminary and no official "auction" process has yet been started. There are no comments from any of those players.
In December, the company downgraded its earnings prospects and announced that CEO David P. Holveck would retire by May. After the report surfaced of a possible buyout, UBS analysts told clients that they wouldn't be surprised, since "The company is searching for a new CEO and a potential sale of the company quite often accompanies this process."
Endo's best-selling product, a Lidoderm pain-relieving patch, will face generic competition later this year as its Opana ER already does. Endo tried to forestall generic competition by kicking dirt all over its original formulation of Opana ER and trying to force the FDA to declare it unsafe. It wanted the agency to require generics makers to provide tamper-proof versions like Endo is now doing. But a judge found its argument wanting and copycats have already been launched in Canada.
The FDA is in the midst of deciding if it will require opioid makers to produce only tamper-resistant drugs that can help deter drug addicts from abusing the popular prescription painkillers. It will hold hearings this month to collect information about how that might best be done. That decision is some months, or more, away and by then it might be to the benefit of whoever then owns Endo.
- read the Reuters story