Endo Health Solutions, formerly known as Endo Pharmaceuticals, wants the pain to end, preferably through the drugs it acquires and markets. The company has a portfolio of both branded and generic prescription products for pain management and other health conditions. Its best-selling drug is Lidoderm, a lidocaine patch that treats nerve pain caused by shingles. Endo also sells pain meds Percocet and Opana, migraine therapy Frova, cancer drug Valstar, and urology treatment Sanctura. Its generics include morphine and oxycodone tablets. In addition, the firm makes and sells urology and prostate devices and provides related medical services.
Endo provides branded products, generics, devices, technology, and services through operating subsidiaries American Medical Systems (AMS), Endo Pharmaceuticals,HealthTronics, and Qualitest. The company expands its drug offerings by licensing or acquiring drug candidates in various R&D stages, as well as through its internal R&D programs.
Sales and Marketing
The company markets its drugs in the US through its own domestic sales force. The company's branded prescription pharmaceuticals, which heavily outweigh its generics in sales, are marketed to physicians in anesthesiology, neurology, oncology, urology, pain management, primary care, and surgery. It also targets retail pharmacies throughout the US. While the company maintains its own marketing team, it outsources most of its manufacturing operations (largely to Novartis Consumer Health and Teikoku Seiyaku) and warehouse and distribution activities (to UPS Supply Chain Solutions).
Endo's revenues grew by 59% in 2011 driven by organic growth in branded pharmaceuticals, including Lidoderm, Opana ER and Voltaren Gel, as well the company's acquisition of AMS, which contributed $300.3 million to Endo's total 2011 revenues. The HealthTronics and Qualitest Phamaceuticals acquistions also contributed substantially to revenue growth.
However, the company's net income in 2011 dropped by 28%, primarily due to a 111% increase in costs of revenues attributed to the AMS purchase, and a full year of activity from the company's 2010 acquisitions. The net income was also impacted by an increase in selling, general and administrative expenses, research and development expenses, and interest expenses.
The company changed its name in 2012 as part of a diversification strategy. Endo Health Solutions' name change accompanied the company's newly adopted business model in which it aims to deliver fully-integrated, end-to-end solutions mainly in pain management and urology for the benefit of providers, payers, and patients by aggregating its four operating businesses into one enterprise.
Although the pain management market is at its core, Endo Health Solutions has been working to expand into broader therapeutic areas (as well as into the medical device and services markets) to reduce its dependence on sales of Lidoderm (30% of total revenues in 2011), which faces patent expiration and thus smaller sales results in coming years.
The company started 2011 with a bang with its purchase of AMS for $2.9 billion in cash. AMS makes urological medical devices to help with incontinence, erectile dysfunction, and pelvic floor prolapse. The purchase of AMS built on Endo's 2010 entry into the medical device and services industries through the $255 million purchase of HealthTronics. Following the purchases, AMS and HealthTronics became independent subsidiaries of Endo.
Also in 2010 the company made a bold expansion move in the generics category when it acquired private drugmaker Qualitest Pharmaceuticals from venture capital firm Apax Partners for some $1.2 billion, strengthening Endo's position in the generics marketplace.
The company was created as Endo Pharmaceuticals in 1997 through the management buyout of a pharmaceutical joint venture between DuPont and Merck. – less