UPDATE 1-Endo to sell Novartis' gel in US, cuts 2008 earns view

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March 4 (Reuters) - Endo Pharmaceuticals Holdings Inc (ENDP.O) said it will sell Swiss drug maker Novartis AG's (NOVN.VX) pain-relief gel in the United States, and as a result cut its 2008 earnings outlook.

The change in earnings view reflects the impact of the additional field force, expected launch costs and amortization of an upfront payment related to the gel, Endo said.

Under its five-year agreement with Novartis, Endo will make an upfront cash payment of $85 million for exclusive U.S. marketing rights for the Swiss drug maker's Voltaren gel, used to ease joint pain.

Endo expects adjusted earnings of $2.03 and $2.07 a share for 2008, down from its earlier forecast $2.18 to $2.22.

However, net sales expectations for the year was raised to a range of $1.25 billion to $1.28 billion from the previous projection of $1.23 billion to $1.25 billion.

Analysts on average were expecting the company to earn $2.12, before special items, on revenue of $1.24 billion, according to Reuters Estimates.

Endo, based in Chadds Ford, Pennsylvania, said it estimates U.S. peak annual sales of $250 million to $300 million for Voltaren gel in treating joint pain.

If annual sales of the gel exceed $300 million, Novartis could receive a one-time payment of $25 million. The Swiss drug maker will also receive royalties on net sales of the gel in the United States.

Voltaren gel is expected to add to Endo's earnings starting 2009, Chief Financial Officer Charles Rowland Jr. said in a statement. (Reporting by Varsha Tickoo in Bangalore; Editing by Himani Sarkar)