![]() I have considered a competitor to Vasostrict a material risk for ENDP given the company's highly leveraged balance sheet. Personally, I am not surprised by the approval. Perhaps that is why the stock is diving today. Comments on previous articles dismissed EGRX patent win, as readers were highly confident that the company would not receive FDA approval. The latest news has sent the stock back to around $4 (at the time of writing). The company achieved some nice settlements that I highlighted in my last article, which sent the stock well over $5. It can react violently to news in either direction. Market Reaction:ĮNDP is a volatile, battleground stock. Given ENDP's net debt load of ~$6.8 billion and guided EBITDA and interest expense of $1.23-$1.28 billion and $560 million respectively for 2021, losing north of $100 million of EBITDA is a material setback. Therefore, losing $150 million of revenue (without considering lost revenue from any potential lower prices to maintain market share) could cost ENDP at least $120 million of gross margin and likely close to that in EBITDA. Many drugs produced at scale with market exclusivity can generate 80% or even higher gross profits. However, I do not have a view on EGRX stock. If the company takes just 20% market share away from ENDP, it could increase sales by ~$150 million, nearly doubling TTM revenue, with even bigger implications for EBITDA. After which, I believe they expect other manufacturers to be able to manufacture and market similar generics, although I am unaware of any other producers that are far along the approval path. This approval follows Eagle's victory in a patent suit against ENDP in August.ĮGRX expects to have 180-day marketing exclusivity for the generic vasopressin. Yesterday (12/15), the FDA granted approval to Eagle Pharmaceuticals' ( EGRX) generic form of vasopressin to compete with blood pressure drug Vasostrict, Endo Pharmaceuticals' ( ENDP) highest-grossing (and I believe most profitable) product. ![]()
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