Endo International (ENDP) remains one of the market’s most frustrating, confounding stocks. The stock hit a high of over $18 in the second half of 2018. Investors were excited about the potential for Xiaflex to treat cellulite. Late stage clinical trials were extremely positive. The stock free fell after Q3 2018 earnings were announced. Analysts and investors fretted over the fact that an FDA application was not expected until 2019.

Endo has shot the lights out ever since. The company has met or exceeded earnings expectations each quarter. It has reduced its reliance on generics and pain-related drugs. Meanwhile, it has softened the decline in revenue with new drugs and stabilized its EBITDA and margins. Former CEO Paul Campanelli did a yeoman’s job of holding down the fort while generic competitors like Mylan (MYL) and Teva (TEVA) whose revenue and earnings declined sharply. How did investors reward the stock? In Q3 2019 they sold the stock down to below $2 on opioid litigation fears.

Since, ENDP is up barely over 50%. The FDA recently approved the company’s Biologics License Application for collagenase clostridium histolyticum (“CCH”) for the treatment of cellulite. Qwo could create upside for Endo in the way botox created upside for Allergan (AGN). ENDP currently trades under around $3 and the upside from Qwo is likely not priced in. Opioid litigation has created an overhang for the stock. In June New York Governor Andrew Cuomo announced more opioid claims against Endo.

The good news keeps coming for Endo. Famed investor Bill Miller recently called Endo a multi-bagger. We believe him. Read more:


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