BlackRock CEO Larry Fink

Heading into Q3 2018 earnings Endo International (ENDP) had been one of the market’s hottest stocks. The stock had more than doubled heading into earnings. I suspected that after a revenue and earnings beat ENDP would spike higher than its 52-week high of $18.50. Just prior to earnings management announced positive results from Phase 3 studies for CCH in cellulite:

Endo International plc ( ENDP ) announced positive results from two identical Phase 3 RELEASE studies of collagenase clostridium histolyticum or CCH for the treatment of cellulite in the buttocks.

Subjects receiving CCH showed highly statistically significant levels of improvement in the appearance of cellulite with treatment, as measured by the trial’s primary endpoint (RELEASE-1, p=0.006 & RELEASE-2, p=0.002), which was at least a 2-level composite improvement in cellulite severity in the target buttock at Day 71 as compared to subjects receiving placebo.

In addition, RELEASE-1 passed 8 out of 8 key secondary endpoints and RELEASE-2 passed 7 out of 8 key secondary endpoints. CCH was well-tolerated in the actively-treated subjects with most adverse events (“AES”) being mild to moderate in severity and primarily limited to the local injection area.

This was fantastic news, in my opinion. “Statistically significant improvement” are words you want to hear in a clinical drug trial. Xiaflex likely delivered the results needed for FDA approval. The company followed that news with a revenue beat for Q3 2018. Revenue was $745.47 million and non-GAAP eps of $0.71.

ENDP plunged more than 15% post-earnings. The move was inexplicable given remarkable Q3 results. That said, BlackRock’s Larry Fink maintained his colossal bet on ENDP. Shocking The Street, a premium service in conjunction with Seeking Alpha, believes Fink’s bet could lead to another massive move in the shares. Read more:


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