Endo International (ENDP): Staying Neutral In A Transition Year - Citi

Citi analyst, Liav Abraham, reiterated his Neutral rating on shares of Endo International plc (NASDAQ: ENDP) ahead of earnings and sees several headwinds to Qualitest, the company’s legacy generics business, in 2018. Injectables appears to be a durable franchise over the medium term and on the branded side of the business, the recent commencement of a Phase III clinical program for Xiaflex in the cellulite indication is expected in 1Q19 (per a conversation the analyst recently had with the company). However, with limited debt paydown likely over 2018/2019, there is limited flexibility to generate inorganic growth.

The analyst sees 4 key issues evolving through out 2018:

1) incremental competitive pressures on hydrocodone APAP

2) incremental Lidoderm competition from branded, generic, and OTC players

3) potential for two additional entrants in the generic Voltaren gel space with an additional entrant in 2019 based on the timing of clinical bioequivalence trial completion

4) continued growth in the company’s sterile injectables and Xiaflex franchises

No change to the price target of $7.

For an analyst ratings summary and ratings history on Endo International plc click here. For more ratings news on Endo International plc click here.

Shares of Endo International plc closed at $6.56 yesterday.

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