Oppenheimer Comments On Endo Pharmaceuticals 1Q11 Results

According to Oppenheimer, Endo Pharmaceuticals ENDP reported adjusted EPS of $1.00, ahead of our $0.98 estimate and the Street estimate of $0.99. Oppenheimer said that we highlight that ENDP reported total revenues of $560M (higher than our $530M estimate) driven by higher generic revenues. “However, we note a deterioration in gross margin (GM) to 59% vs. our 70% estimate owing to a change in product mix following the Qualitest acquisition. Importantly, we believe strong growth in the generics business should support ENDP's goal of 10-15% CAGR between 2010-2012 for generics revenue. Early signs suggest a strong Fortesta launch prompting an increase in our 2011 Fortesta revenue estimate to $33M from $25M. We adjust our estimates and note we expect an increase in GM beginning 4Q11.” Endo Pharmaceuticals closed yesterday at $58.55.