How Paladin Acquisition Help Endo Health Solutions Inc. (NASDAQ:ENDP)?
Endo Health Solutions Inc. (NASDAQ:ENDP) saw a quick rally, following the announcement of a new addition to its portfolio- Paladin Labs. The acquisition cost Endo Health Solutions $1.5billlion. The company will now be held by an Irish holding company.
Investor sentiment proves that a combination of both Paladin Labs and Endo Health Solutions is worth more than either of the companies individually.
Accordingly, every Paladin shareholder will now receive 1.6331 shares of the new stock along with a single Knight Therapeutics share, which will be constituted newly. Shareholders of Endo Health Solutions will continue to hold one share of the company that will be formed newly.
Earlier this year, Endo Health Solutions along with other health companies such as C.R.Bard Inc. (NYSE:BCR), Boston Scientific Corporation (NYSE:BSX) had explored settlements – against vaginal-mesh implants. Although, Endo Health Solutions as well as BCR have already settled some of the lawsuits, a majority are pending yet and the company needs to close quickly on these suits. Also in trouble is Johnson & Johnson’s subsidiary- Ehticon. However, the company claims that will offer settlement only to ‘credible’ claims and will not offer settlement on ‘unfounded’ claims.
Despite strong gains the company is affected by claims against implants. The first set of trials in Charleston, BCR was ordered to compensate by $250K.
Endo Health Solutions has also been successful in submitting the complete response for its injection -Aveed – in September last to FDA. The drug is expected to enter the market segment for treating hypogonadism, a condition in men, by treating testosterone undecanoate injections. This has been assigned PDUFA action for February next year.
Endo in the previous quarter expanded its portfolio, by acquiring generics company – Boca Pharmacal – at the cost of $225million.
Boca has a strong pipeline with Qualitest and offers speciality generics. Endo expects to strategically move towards achieving its goal of becoming a specialty healthcare company. Now, the acquisition of Paladin Labs further defines this focus.