Goldman Sachs Analyzes Fortesta Gel Approval (ENDP)

Endo Pharmaceuticals Holdings ENDP announced the FDA approval of Fortesta Gel, the company's topical treatment for low testosterone, Goldman Sachs reports. The company expects to launch the product early in 2011. “Fortesta enters a large and growing market, but we maintain our sales forecast (a potentially conservative $50 mn 2013) given limited differentiation and increasing competition,” Goldman Sachs writes. “According to IMS data, annual sales for topical testosterone products total nearly $1.2 bn with year-overyear growth in excess of 20%. “We note that the Fortesta approval is one of two near term FDA decisions for Endo with the PDUFA for their tamper resistant Opana formulation coming on January 7. We view approval of Opana TRF as likely (possibly with a minor delay), see a full switch as probable, but we do not expect any change in growth trajectory. “The key benefit should be exclusivity related, which we have already reflected in our model by removing 2013 generic erosion from our Opana forecast. A key long-term question is the extent of the exclusivity extension given the inherent uncertainty around formulation patents.” Goldman Sachs said that it has not made any changes to its estimates, PT, or Neutral rating on shares of Endo Pharmaceuticals, which closed Wednesday at $35.22.