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Endo International (ENDP)'s Qualitest to Lay Off 300 in Shuttering of Its North Carolina Facility

11/4/2016 7:22:33 AM

Endo International's Qualitest to Lay Off Nearly 300 in Shuttering of Its North Carolina Facility November 4, 2016
By Alex Keown, Breaking News Staff

CHARLOTTE, N.C. – Qualitest Pharmaceuticals, a subsidiary of Ireland-based Endo Pharmaceuticals (ENDP), plans to lay off 282 employees in the Queen City by Dec. 31, according to a WARN notice filed with the N.C. Department of Commerce on Oct. 31.

Employees have been notified, WRAL reported this morning. Positions being cut include 20 chemists, 59 manufacturing operators and 42 packaging employees, WRAL said. The Qualitest cuts were not unexpected. Positions are being cut as parent company Endo is undergoing a restructuring and evolution of its corporate strategy to meet some financial challenges the company highlighted in May. During an announcement that month, the Irish company announced it was slashing its 2016 revenue forecast due to increased competition and regulatory delays. Along with that forecast change, the company said it was terminating 740 positions and would be shuttering the Qualitest site in Charlotte, a move expected to save the company about $60 million next year, according to reports.

At the time Endo announced its restructuring, former president and Chief Executive Officer Rajiv De Silva said the company faced “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.” 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.

De Silva stepped down from his position as president and CEO, as well as his spot on the board of directors, in September. Paul V. Campanelli, who served as president of the company’s generic and OTC drugs division, was tapped to succeed De Silva. Campanelli was the former CEO of Par Pharmaceuticals, which Endo acquired in September 2015.
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Endo acquired Qualitest, a generic drug manufacturer, in 2010 for $1.2 billion. At the time of the transaction, Endo said Qualitest was the sixth largest U.S. generics company as measured by prescriptions filled.

Endo’s restructuring came after a year of growth through acquisitions. 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 (AUXL) 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 . Then Endo snapped up Par Pharmaceuticals for $8.5 billion to spur sales growth in generic medications. The acquisition of Par brought approximately 100 products in multiple dosage forms and delivery systems, including oral solids, oral suspensions, injectables and high barrier-to-entry products. Its aggressive M&A practices gave Endo a debt of about $8.2 billion, while it has a market cap of about $3.2 billion.

In addition to its acquisitions, Endo 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.

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