Specialist
Former SVP at Endo International plc
Agenda
- Ongoing US opioid litigation, focusing on Endo International (NASDAQ: ENDP)
- Expected litigation liabilities across opioid, price fixing and mesh settlements
- Branded and generic portfolio analysis, including post-coronavirus growth outlook for Vasostrict
- Endo's Novavax COVID-19 vaccine manufacturing agreement and outlook for alternative service offerings
- H2 2021 growth and pipeline outlook
Questions
1.
Endo has been through quite a lot in the last couple of years following a decline in the generics market and ongoing litigation from multiple standpoints. What’s your broader assessment of how Endo has been positioned in the market? To what extent have its prospects changed in the last couple of years?
2.
What are your key insights into the opioid litigation landscape? What read-through might we get from Purdue’s bankruptcy filing and the scale of litigation from so many different US states? What are your timeline and liability expectations for Endo’s opioid business? How might that differ vs other players involved in this litigation?
3.
Could you estimate a number for potential liability in these opioid litigations? We’ve heard somewhere between USD 50bn in settlements. Do you think that seems too high or too low?
4.
What are your timeline expectations for the ongoing mesh settlement payments along with any further potential legal liabilities such as generics price-fixing?
5.
Endo is anticipating a low single-digit to low double-digit erosion of Vasostrict revenues post-coronavirus, despite 50% growth in 2021 which was obviously fuelled by the pandemic. How do you expect this to play out, and what are your expectations for the timing and impact of longer-term competition to Vasostrict?
6.
Xiaflex’s revenues are expected to grow 30-40% in 2021, with expected H2 uptick post-coronavirus. The company is also counting on continued investment in brand awareness and patient outreach to drive that growth. How would you assess the work it has done so far? Are there any areas where growth expectations might be either above or below your own predictions?
7.
You mentioned the decrease in the generics business in particular. Endo is expecting 25-30% YoY decline for that particular subsegment in 2021, following an 11% decline in 2020. The company has historically been quite conservative, but would those numbers fall in line with what you might expect? How does that expected portfolio decline differ from other generic firms? Do you think Endo is more or less exposed?
8.
What are your thoughts on the growth runway for Endo’s medical aesthetics division as a way to potentially offset the continued generics decline? Is the company doing enough and what further steps would you expect it to take?
9.
Other specialists have noted a potential growth avenue for generics players is taking a CDMO [contract development and manufacturing organisation] approach. What are your thoughts on Endo’s agreement with Novavax to provide fill-finish manufacturing services for its COVID-19 vaccine? Do you think there are any potential financial benefits? What might the adoption of this model mean as a potential growth avenue, given the limitations to the company’s pipeline?
10.
We know that Endo’s ultimate goal is to be anywhere from 3-4x levered in the long term. What are your expectations for that potential leverage? What is the likelihood of a potential bankruptcy or any further impact from the ongoing opioid liability as well as the underlying generic business decline?
11.
What is your best- and worst-case scenario for Endo? What do you suggest we continue to monitor?
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