Boost for Endo Pharma - Analyst Blog

Endo Pharmaceuticals (ENDP - Snapshot Report) recently received a boost when the US Food and Drug Administration (FDA) approved its oral contraceptive, Emoquette, for the prevention of pregnancy.

Emoquette is the generic version of Johnson & Johnson’s (JNJ - Analyst Report) oral contraceptive Ortho-Cept. The approval of the oral contraceptive further strengthens Endo Pharma’s portfolio.

Emoquette was added to Endo Pharma’s portfolio via the acquisition of Qualitest Pharmaceuticals late last year for $1.2 billion in cash. The acquisition helps diversify Endo Pharma’s business apart from bolstering its position in the generic and pain drug portfolios.

Endo Pharma Drug Launched

Recently, Endo Pharma launched Fortesta Gel for treating men (above 18 years of age) with low levels of testosterone (low T or hypogonadism) in the US. The product was approved by the US Food and Drug Administration (FDA) late last year.

Hypogonadism results from the failure of the body to produce normal amounts of the male sex hormone testosterone. The disorder is associated with erectile dysfunction and reduced sexual urge, fatigue, energy loss, depression, waning of secondary sexual characteristics in addition to osteoporosis.

The disorder affects approximately 14 million men in the US. However, only approximately 9% are being treated. The entry of Endo Pharma’s newly approved product into the market will widen the treatment options for hypogonadism patients. Endo Pharma’s gel (a clear, colorless, odorless gel) is prohibited from being applied to the upper body.

Fortesta Gel will compete mainly with Abbott Laboratories' (ABT - Analyst Report) AndroGel. The availability of the product in US markets would further boost the portfolio at Endo Pharma, which has been on an acquisition spree to expand its business.

Apart from the acquisition of Qualitest Pharmaceuticals, Endo Pharma acquired Penwest Pharmaceuticals Co. to sustain and drive growth in the area of pain management. 

Our Recommendation

Currently, we have a Neutral stance on the stock in the long-run, which is supported by the Zacks #3 Rank (short-term Hold recommendation) carried by the company.

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