Endo reports higher fourth-quarter revenue, but lower profit

Posted: February 25, 2012

Endo Pharmaceuticals, based in Chadds Ford, reported a 57 percent increase in revenue for the fourth quarter of 2011, but acquisition costs sliced profits by 61 percent.

Revenue for the quarter rose to $803 million, compared with $511.2 million in the same quarter of 2010.

Net income dropped from $93 million in the fourth quarter of 2010 to $36.6 million in the latest period.

In June, Endo paid $2.9 billion for American Medical Systems, which helped with fourth-quarter revenue, but Endo repaid $140 million in debt on the purchase during the fourth quarter and $290 million for the year, which cut into profits.

The company faces short-term supply challenges because its second- and third-best-selling drugs - Opana ER and Voltaren Gel - are made at a Novartis plant in Lincoln, Neb., that was shut down because of quality-control problems. Some production has resumed.

"We are addressing some of the short-term challenges in branded-product supply and are confident that the focus of investors will soon return to the positive sustainable-growth story of our diversified business, with multiple drivers for growth in 2012," Endo president and chief executive officer Dave Holveck told analysts in a conference call Friday.

Endo has tried to diversify with generic drugs and devices, but pain medication is a big part of the business.

Lidoderm remains its best-selling prescription drug, with $825 million in sales in 2011, 5 percent more than in 2010.

The company hopes to make a lot of money from Opana ER, but the drug is in the family of painkillers that have been overused illegally, often with fatal consequences.

Endo got a patent last week for a new pill that theoretically is harder to split. Illegal dealers have been known to split pills to resell to addicts.

Opana production resumed in January but is still restricted by Drug Enforcement Administration rules. The new versions of the pill may be on the market in March or April.

Contact staff writer David Sell at 215-854-4506, dsell@phillynews.com, or @phillypharma on Twitter. Read his blog at www.philly.com/phillypharma.