(Reuters) - Endo International Plc on Tuesday lowered its full-year revenue forecast, saying it expected lower sales of branded drugs to add to the pricing pressure its generic drugs are facing, sending the company’s shares to their lowest since 2003.
Generic drugmakers are being hurt by an acceleration in the decline of drug prices as U.S. retail pharmacies wield more leverage during purchases at a time when regulators are pushing for faster approval of these copycat drugs.
Teva Pharmaceutical Industries Ltd, the world’s largest generic drugmaker, last week posted dismal second-quarter results due to the accelerated price erosion in the United States.
Endo’s revenue from its U.S. generics unit in the second quarter was virtually unchanged from a year earlier as a sharp 34 percent decline in sales of its older generics drug was offset by strength in its sterile injectables as well as new launches and alternative dosages businesses.
Cowen & Co analyst Ken Cacciatore said the pressure on Endo’s generics was unlikely to relent and any near-term stabilization could prove elusive.
“We have very little faith in the consistency of the operations from quarter to quarter,” Cacciatore said.
Endo said it continues to expect sales at its generics business to decline in the high single- to low double-digit percentage range this year.
The company lowered its full-year total revenue forecast to $3.38 billion to $3.53 billion from $3.45 billion to $3.60 billion.
The lowered forecast reflects, in part, the withdrawal of Endo’s branded opioid painkiller Opana ER. Endo agreed to pull the drug in early July at the behest of a U.S. regulator, due to the burgeoning opioid epidemic.
Endo now expects full-year sales of its branded drugs to decline in the mid- to high-teens percent range, compared with its previous forecast of a drop in the low- to mid-teens range.
The company cut its forecast for adjusted profit from continuing operations to $3.35-$3.65 per share from $3.45-$3.75.
Endo’s second-quarter adjusted profit of 93 cents per share handily beat Thomson Reuters I/B/E/S estimates by 20 cents.
Endo on Monday agreed to resolve long-standing claims over certain vaginal mesh products by increasing its liability reserve by $775 million and making payments from the fourth quarter through 2019.
The lawsuits stemmed from thousands of women who said they were injured after using the devices.
Endo shares were trading down 6.3 percent at $8.75. They fell as much as 10 percent earlier.
Reporting by Akankshita Mukhopadhyay and Manas Mishra; Writing by Ankur Banerjee; Editing by Martina D'Couto and Savio D'Souza