Endo Pharma to Cut 740 Employees and Shakes Up U.S. Senior Management in Restructuring

May 6, 2016
By Alex Keown, BioSpace.com Breaking News Staff

DUBLIN – of Endo Pharmaceuticals stock plunged more than 30 percent in after-hours trading following the company’s announcement it was slashing its 2016 forecasts due to increased competition and regulatory delays.

“…as we move further into 2016, we are rebasing our full-year financial expectations due to the impact of several previously unanticipated headwinds: new competitive entrants, including for Voltaren Gel; greater than expected price erosion across the Generics sector; and delays on regulatory actions related to certain Endo products,” Rajiv De Silva, president and chief executive officer of Ireland-based Endo said in a statement.

Sales of Voltaren Gel, a non-steroid used to treat joint pain in the hands, dropped 21 percent during the first quarter, largely due to generic competition, the company said. However, during the quarter sales of Xiaflex, used to treat Dupuytren's contracture is adults, jumped more than 57 percent largely due to increased demand for the product, the company said. Additionally, Endo saw regulatory approval of chronic pain drug, Belbuca.

“We believe in the potential of our core long-term growth drivers: Xiaflex, including its related pipeline, Belbuca and the Par generics pipeline and sterile injectables business,” De Silva said.

De Silva said the company would undergo a restructuring and evolution of its corporate strategy to meet the new challenges, which includes laying off about 740 employees at two facilities as well as the shuttering of a manufacturing site in Charlotte, N.C. The moves are expected to save the company about $60 million, the Miami Herald reported.

Shares of Endo International have steadily slid since a February high of $54.30. The stock is currently down more than 60 percent since then, trading at $17.50 per share as of this morning.

Throughout 2015, Endo maintained a trend of expanding its portfolio offerings through acquisitions, including a $130 million deal to acquire a large portfolio of anti-pain anti-infectives, cardiovascular and other therapeutics areas from Aspen Pharmacare Holdings. In January 2015, Endo acquired Auxilium Pharmaceuticals for $2.6 billion. That transaction broadened Endo’s offerings of urological and orthopedic therapies, including Xiaflex, Testopel and Stendra. The Auxilium deal came on the heels of deals to buy Boca Pharmacal and DAVA Pharmaceuticals . More recently Endo snapped up Par Pharmaceuticals for $8.5 billion to spur sales growth in generic medications. The acquisition of Par brings approximately 100 products in multiple dosage forms and delivery systems, including oral solids, oral suspensions, injectables and high barrier-to-entry products.

The company has also divested itself of several divisions that were capital resource drains, including its AMS Men’s Health business and Astora Women’s Health, the maker of vaginal mesh used to treat pelvic organ prolapse in addition to urinary incontinence. The company said it has set aside money for litigation against the vaginal mesh products.

In addition to its restructuring, Endo announced the appointment of two new members to its board of directors—Douglas Ingram, former president of Allergan, Inc. and current CEO of Chase Pharmaceuticals Corporation and Todd Sisitsky, managing partner of TPG Capital. The company also announced Brian Lortie, president of its U.S. branded pharmaceuticals unit, was stepping down. No successor has yet been named.