Endo acquires Qualitest Pharmaceuticals

Endo PharmaceuticalsDec 2 2010

• Endo increases 2010 guidance for revenue to approximately $1.7 billion and increases adjusted diluted EPS to a range of $3.35 to $3.40.  Decreases 2010 Reported or GAAP diluted EPS to a range of $1.66 to $1.74.
• Endo reaffirms 2011 guidance for revenue of $2.2 billion to $2.3 billion, adjusted diluted EPS of $4.15 to $4.25. Revises 2011 Reported or GAAP diluted EPS to a range of $2.42 to $2.52.

Endo Pharmaceuticals (Nasdaq: ENDP) announced today the completion of its acquisition of Qualitest Pharmaceuticals.  Endo announced Sept. 28 that it entered into a definitive agreement to acquire Qualitest Pharmaceuticals, a leading, privately held generics company in the U.S., for approximately $1.2 billion in cash.

"This acquisition marks another milestone in the transformation of Endo and accelerates our stated strategy of building a diversified healthcare company, better able to respond to the changing economics that drive the U.S. healthcare environment," said Dave Holveck, president and CEO of Endo. "We believe this transaction provides Endo with an enhanced competitive position and critical mass in the generics market, further diversifying our business lines and product offerings and enhancing our portfolio of pain management products. When combined with our growing Branded Pharmaceuticals and Devices and Services businesses, we believe this transaction not only significantly boosts our revenue and earnings growth but also makes us a more comprehensive healthcare solutions provider."

Financial Guidance

Endo now estimates 2010 revenues to be approximately $1.7 billion versus previous revenue guidance of $1.63 billion to $1.68 billion. The Company is also increasing 2010 adjusted diluted earnings per share guidance to a range of $3.35 to 3.40 and reducing reported (GAAP) diluted earnings per share guidance to a range of $1.66 to $1.74. The changes in 2010 financial guidance reflect the earlier than expected close of the Qualitest transaction.  

Endo reiterates its 2011 revenue guidance of between $2.2 billion and $2.3 billion and its adjusted diluted earnings per share guidance of between $4.15 and $4.25. The Company is increasing Reported (GAAP) diluted earnings per share guidance to a range of $2.42 to $2.52.  Detailed reconciliations of projected adjusted diluted earnings per share to reported diluted earnings per share are provided below, and are subject to certain assumptions as set forth below, which could have a significant impact on the actual reported diluted earnings per share in the future. The company's guidance for reported (GAAP) diluted earnings per share does not include any estimates for potential future changes in the fair value of contingent consideration or for potential new business development transactions.  For an explanation of Endo's reasons for using non-GAAP measures, see Endo's Current Report on Form 8-K filed today with the Securities and Exchange Commission.