Endo Pharmaceuticals total revenues for second-quarter 2010 increase 6% to $396.5 million

Endo PharmaceuticalsJul 30 2010

• Total quarterly revenues increase 6 percent versus prior year; branded drug sales up 8 percent
• Reported diluted EPS of $0.44, up 69% from prior year; adjusted diluted EPS of $0.81, reflecting growth of 11 percent from 2009
• Company reiterates previous financial guidance of revenues in a range of $1.63B to $1.68B
• Company increases adjusted diluted EPS to a range of $3.25 to $3.30 and now expects Reported or GAAP diluted EPS to be in a range of $1.99 to $2.07

Endo Pharmaceuticals (Nasdaq: ENDP) today reported financial results for the second quarter 2010.

Total revenues during the second quarter of 2010 increased 6 percent to $396.5 million, compared with $373.1 million in the same quarter of 2009.  Net income for the three months ended June 30, 2010 was $51.5 million, compared with $30.0 million in the comparable 2009 period.  As detailed in the supplemental financial information below, adjusted net income for the three months ended June 30, 2010, was $94.7 million, compared with $85.9 million in the same period in 2009.  Reported diluted earnings per share for the quarter ended June 30, 2010, were $0.44 compared with $0.26 in the second quarter of 2009.  Adjusted diluted earnings per share for the same period were $0.81, compared with $0.73 reported in 2009.

"I'm very pleased with the state of our business today.  We had a very good second quarter with strong revenues and earnings," said Dave Holveck, president and CEO of Endo. "We're executing our business strategy well and accomplishing our goals for this year.  I believe we are on the right path to sustainable, long-term growth and to becoming one of our industry's premier providers of comprehensive healthcare solutions."

Second Quarter 2010 Financial Results and Full Year 2010 Financial Guidance

The second quarter benefitted from good contributions from across our business.  Branded drug sales rose 8 percent, year-over-year, reflecting strong growth by key products in pain, urology and oncology.  Revenues from our generics business decreased 9 percent.  Prior year results for generics benefited from an unusual market shortfall in the supply for certain generic pain treatment products.  Our new products are performing better than anticipated, particularly SUPPRELIN^® LA.  The innovative use of Endo's HYDRON^® Implant Technology in this product is becoming the first choice in treating central precocious puberty and sales are up 67 percent over the second quarter of 2009.

The company continues to anticipate revenues of between $1.63 and $1.68 billion this year.  However, the company expects that a combination of continued strong performance in its current lines of business, an earlier close of the HealthTronics acquisition than assumed in previous expectations, and continued cost containment initiatives will improve adjusted diluted earnings per share.  As a result, at current exchange rates, adjusted diluted earnings per share is now expected to be between $3.25 to $3.30 per share.  Reported (or GAAP) diluted earnings per share are now expected to be between $1.99 to $2.07 per share, reflecting incremental milestone payments to R&D partners and the purchase accounting impact of the HealthTronics acquisition, among other factors.

Selected Operating Highlights

FORTESTA^™ Complete Response

On July 1, 2010, Endo Pharmaceuticals announced that the company submitted a complete response to the U.S. Food and Drug Administration (FDA) following the company's receipt of a Complete Response letter in October 2009 related to the New Drug Application (NDA) submission for FORTESTA^™ (testosterone) 2% gel.

The FDA has informed Endo Pharmaceuticals that the response is considered to be complete and has issued a PDUFA date of Dec. 30, 2010.  The company's Class 2 resubmission is the next step in its intention to offer FORTESTA as a treatment option in the United States for men diagnosed with low testosterone (Low T), also known as hypogonadism.

Agreement with Impax Laboratories to Settle OPANA® ER Patent Litigation

On June 8, 2010, Endo Pharmaceuticals and Penwest Pharmaceuticals announced that the companies settled litigation with Impax Laboratories, Inc. regarding its production and sale of generic formulations of OPANA ER (oxymorphone hydrochloride) Extended Release tablets.  

Under the terms of the settlement, Endo and Penwest have agreed to grant a license to sell a generic of OPANA ER on Jan. 1, 2013. Impax Laboratories will have 180-days of exclusivity for 5, 10, 20, 30 and 40 mg tablets.

HealthTronics Acquisition Complete

On July 15, 2010, Endo Pharmaceuticals announced the completion of its acquisition of HealthTronics, Inc. a leading U.S. provider of urological products and services, located in Austin, Texas.  HealthTronics is now a wholly owned subsidiary of Endo.

Endo Pharmaceuticals Introduces 500 mg Dose of Mycophenolate Mofetil

On July 16, 2010, Endo Pharmaceuticals received an ANDA approval from the FDA for a 500 mg dose of Mycophenolate Mofetil.  A 250 mg dose of Mycophenolate Mofetil was launched in March 2010.  Mycophenolate Mofetil is used in combination with medications such as cyclosporine or corticosteroids to keep the body's immune system from attacking and rejecting a transplanted organ (e.g., kidney, liver, heart).

Selected Product Review

PAIN PRODUCTS

LIDODERM^®:  For the quarter ended June 30, 2010, net sales of LIDODERM were $196.1 million, compared with $195.5 million reported in the same period a year ago. For the six months ended June 30, 2010, net sales of LIDODERM were $378.7 million, compared with $367.1 million reported in the same period a year ago.  The company continues to expect low single-digit growth for Lidoderm in 2010.  

OPANA^® ER and OPANA^®:  Combined net sales for the OPANA franchise increased 34 percent to $73.8 million for the second quarter 2010, compared with $55.2 million in the same period a year ago. Combined net sales for the OPANA franchise increased 30 percent to $140.0 million for the six months ended June 30, 2010, compared with $108.0 million in the same period a year ago.      

FROVA^®: Net sales of FROVA were $14.7 million for the three months ended June 30, 2010, compared with $15.2 million for the same period in 2009.  Net sales of FROVA were $29.8 million for the six months ended June 30, 2010, compared with $27.5 million for the same period in 2009.  

Voltaren^® Gel: Second quarter 2010 net sales of Voltaren Gel were $26.3 million, compared with $25.5 million for the same period in 2009. Net sales of Voltaren Gel for the six months ended June 30, 2010 were $46.7 million, compared with $37.9 million for the same period in 2009.   

ONCOLOGY/ENDOCRINOLOGY PRODUCTS

SUPPRELIN^® LA: Net sales of SUPPRELIN LA for the second quarter were $12.2 million compared with $7.3 million for the same period in 2009. Net sales of SUPPRELIN LA for the six months ended June 30, 2010 were $22.8 million compared with $10.0 million for the same period in 2009.    

VANTAS^®: Net sales of VANTAS for the second quarter were $5.0 million compared with $5.7 million for the same period in 2009.  Net sales of VANTAS for the six months ended June 30, 2010 were $9.3 million compared with $7.6 million for the same period in 2009.  

VALSTAR^™: Net sales of VALSTAR for the second quarter were $4.0 million. Net sales of VALSTAR for the six months ended June 30, 2010 were $7.8 million.  

OTHER BRANDED PRODUCTS

For the second quarter of 2010, net sales of other branded products were $2.5 million, compared with $3.9 million in the same period in 2009.  For the six months ended June 30, 2010, net sales of other branded products were $5.4 million, compared with $8.3 million in the same period in 2009.  

GENERIC AND NON-PROMOTED PRODUCTS

For the second quarter of 2010, net sales from the company's generic products were $27.7 million, compared with $30.3 million in the same period in 2009.  For the six months ended June 30, 2010, net sales from the company's generic products were $53.6 million, compared with $72.7 million in the same period in 2009.  Net sales of Percocet^® were $31.8 million for the three months ended June 30, 2010, compared with net sales of Percocet^® in the same period in 2009 of $32.0 million.  For the six months ended June 30, 2010, net sales of Percocet^® were $60.5 million, compared with $65.7 million in the same period in 2009.