Endo Health Solutions Earnings Call Insights: Opana ER and Mesh Liability

Endo Health Solutions Inc (NASDAQ:ENDP) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.

Opana ER

Gregg Gilbert – Bank of America Merrill Lynch: My first one is about Opana ER, what makes the company confident that the FDA will remove the non-abuse deterrent oxymorphone products in May. If you could provide the latest color you have on that.

Ivan Gergel, M.D. – EVP, R&D, and CSO: Clearly, we are pleased to say they put out a guidance and obviously we continue to work closely with them on the guidance. We think the epidemiological surveillance data that we are getting in is very supportive of what we expect these abuse deterrent formulations should do it supporting our original contention in this regard.

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Gregg Gilbert – Bank of America Merrill Lynch: Ivan are you and the team focused on other abuse deterrent formulations of oxymorphone obviously generic companies are pretty quick to copy technologies especially the simpler ones, is there a program that you can speak to for other forms going forward?

David P. Holveck – President and CEO: Certainly. Obviously we believe very much in the tamper-resistant – these tamper-resistant formulation of medical abuse deterrent formulations. We believe they do provided a benefit. As I said, obviously, the epidemiological data is encouraging and, as you know, we are a Company very much focused in pain and certainly, if there’s something, if there’s more we can do to help in the sort of prevention of abuse certainly, certainly we’ll be looking at.

Gregg Gilbert – Bank of America Merrill Lynch: My next one is for Julie on the Qualitest front. Despite in light of the recalls are you confident that the facility and facilities are in good shape from an FDA regulatory perspective and maybe you can talk about when the (AMC) were last there and what any findings were?

Julie H. McHugh – COO: Sure. Yes, we’re obviously very focused on continuous improvement of our manufacturing processes including our quality systems, and we’re making some dramatic improvements in the course of the two years that we’ve owned the Qualitest facility and we will continue to remain committed to all of those process improvements as we move forward. Our last inspection and we’ve got a number of different sites from – as you know manufacturing sites now focus on Qualitest. The last time we had FDA general GMP inspection was in 2011 in Huntsville and in Charlotte.

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Mesh Liability

Chris Schott – JPMorgan: I just had a couple questions here; first on Opana. How should we think about realized price for Opana as we go through this year? Has there been any impact at all from the generic launch on for instance you are rebating strategy anything we should think about in that front? And my second question was on mesh liability, what’s you latest thinking about how we should be evaluating or how you are evaluating risk on that front and Can you maybe just give us any timing of initial cases we should be watching here?

Julie H. McHugh – COO: So, I’ll take the first question and with respect to Opana and pricing and how to think about that. We do as I have mentioned earlier have very strong formulary access for Opana ER. We’ve been very successful with our initial interactions with payors in that. We have extended our contract terms to payors for the new formulation and we don’t anticipate having to offer additional rebates at this time. In fact, many of the payors have been very cooperative and recognizing the value of these tamper-resistant formulation and in a number of major payors have chosen to block the generic – block access to the generic versions that have been recently approved. So, we remain confident as long as the FDA does in fact uphold our business petition and doesn’t approved additional generic formulations that we have a growth asset on our hands for the years ahead.

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Alan G. Levin – EVP and CFO: Just one more a quick comment on the pricing, so remember when you are doing year-over-year comparisons to the performance last year, because the change in the dose mix overall decreased the overall percentage the 40 mg represented. You will see again a little bit of a price differential there but we expect that to kind of normalize as we move forward from this point.

David P. Holveck – President and CEO: Let me just say a few words relative to the other question, relative to the AMS MS litigation, I think first of all we – in looking forward we see each cases as a very isolated individual element and they have to support on the facts. So, I think we again are very heavy into looking at the each one of those cases. I think the other element that is I think a step in the right direction in February of 2012 the multi-district litigation and the southern district of West Virginia has consolidated the cases and I think this gives us also some continuity because it’s all under the same judge. So again our belief is that it is an element that is what I call under obviously very close management and the next, I think trial that we see is in May. So this particular point again we, we feel again the number of cases and it should be reminded that the FDA was looking at pelvic organ prolapse in most of these cases and a high percentage of these cases are in stress incontinence. So at least, these are very different clinical situations and therefore cast a very different light on the individual trials themselves.

A Closer Look: Endo Health Earnings Cheat Sheet>>