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Why Endo (ENDP) Stock Wilted After its Surge on Tuesday?

·3 min read

Shares of Endo International Plc ENDP crashed 26% on Jun 29, right after the pharma stock witnessed a surge the day before.

Endo is knee-deep in trouble with several litigation suits over opioid sales that have caused shares to underperform for quite some time.

The company’s unfavorable debt profile has also been a headwind. As of Mar 31, 2022, the company’s debt to total capital ratio was 119.4% compared unfavorably with the industry’s 43.6%.

Endo has also been negotiating with its lenders and senior bondholders about possibly restructuring more than $8 billion of debt.

Per a Bloomberg article, Endo’s senior leaders have advocated for the company to file a bankruptcy to survive this turmoil. They have also suggested that Endo skip paying the upcoming interests to shareholders to preserve company cash.

Since the bulk of the due interests will be collected by junior bondholders, they want Endo to restructure the debt out of court.

In the year-to-date period, Endo’s shares have plunged 86.1% in the year so far compared with the industry's 22.5% decline.

Endo rallied 85% on Jun 28 due to the sudden demand surge for women’s contraceptives across the United States.

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Zacks Investment Research

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The demand surge for birth control pills was a reaction to the U.S Supreme Court’s decision to overturn Roe v. Wade, announced on Jun 24.

Endo’s subsidiaries Par Pharmaceutical, which markets birth control pills, Previfem, and Palladin Labs, which produces Plan B pills, a type of emergency birth control pill, saw a rise in demand for its products post the ruling.

Overturning this landmark deal has women across the U.S. stocking up on emergency contraceptives, opening up an opportunity for biomed firms focusing on women’s health and contraception needs, such as Evofem Biosciences EVFM

Shares of Evofem Biosciences rallied 160% on Jun 27, continuing a surge that began after the decision on Roe v. Wade was out. However, its gains have now stabilized.

Evofem is known for Phexxi, a non-hormone contraceptive gel that prevents pregnancy by altering the users’ PH level, demonstrated to be 93% effective in FDA trials.

Amid the massive setback in women’s reproductive rights, Evofem has attracted the attention of investors, who believe the company has the potential to fill the gap as abortion becomes illegal in the United States.

Endo International plc Price


Endo International plc Price
Endo International plc Price

Endo International plc price | Endo International plc Quote


Zacks Rank and Socks to Consider

Endo currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the same sector is Aridis Pharmaceuticals ARDS and Anavex Life Sciences AVXL, each of which holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Aridis Pharmaceuticals’ loss per share estimates for 2022 have narrowed from $1.78 to 34 cents in the past 30 days. The same for 2023 has narrowed from 75 cents to 60 cents in the same time frame. Shares of ARDS have plunged 51.5% in the year-to-date period.

Earnings of Aridis missed estimates in two of the trailing four quarters and beat the same on the remaining two occasions, the average negative surprise being 75.16%.

Anavex Life Sciences’ loss per share estimates for 2022 have narrowed from 85 cents to 60 cents in the past 30 days. Shares of AVXL have plunged 42.9% year to date.

Earnings of Anavex beat estimates in two of the last four quarters and missed the mark on the other two occasions, the average surprise being 0.48%.

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