(Reuters) - Endo International Plc (ENDP.O) on Tuesday posted a quarterly profit that beat Wall Street estimates as the company makes good on plans to pivot to its injectables and branded drugs businesses, while remaining “laser-focused” on paying down long-term debt.
Shares rose 5.9 percent to $5.95 in premarket trading.
As large retail pharmacies wield increasing heft in negotiating down prices of generic drugs, Endo has pushed to expand other segments of its business, such as sterile injectables and medical aesthetics, while discontinuing sales of products that are not as profitable.
“We’re all about going forward right now,” Chief Executive Officer Paul Campanelli said on a conference call. “Our retail business is still very important to us, but when we look toward growth, it’s clearly coming on the sterile side and our branded side focused on Xiaflex.”
Endo’s drug Xiaflex, approved to treat a condition that causes painful erections as well as a disease that hinders finger movements, earned a revenue of $57.1 million in the quarter, about 15 percent higher than last year.
The company is also testing the drug’s ability to reduce cellulite, a condition that causes dimpling of the skin especially on hips and thighs, and expects results from trials in the first quarter of 2019.
In a bid to augment its sterile injectables unit, which raked in $215.9 million in the quarter, last month Endo announced a surprise acquisition of Somerset Therapeutics, which Endo expects to “more than double” its footprint in the market.
Analysts believe the drugmaker is on the right track.
“While Endo has had a challenging time ... the company continues to hit targets and pursue operational changes needed to address the current environment,” RBC Capital Markets Randall Stanicky said in a client note.
Endo reiterated its forecast for 2018, saying it expects a revenue of between $2.6 billion and $2.8 billion and adjusted earnings in the range of $2.15 to $2.55 per share.
As of March 31, the drugmaker said it had $8.24 billion in long-term debt.
Excluding one-time items, Endo earned 67 cents per share, above the average analyst estimate of 55 cents per share, according to Thomson Reuters I/B/E/S.
Net loss attributable to shareholders widened to $505.5 million, or $2.26 per share, in the first quarter ended March 31, hurt by a hefty asset impairment charge.
Revenue fell 32.5 percent to $700.5 million, ahead of estimates of $691.83 million.
Reporting by Tamara Mathias in Bengaluru; Editing by Shailesh Kuber