Endo International (ENDP) remains one of the market’s most-confounding stocks. The company hit a 52-week 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.

In the meantime, all Endo has done was deliver solid revenue in the face of declining generics and pain-related drugs, generate consistent cash flow and solid margins, and smash earnings expectations quarter after quarter. One would think that consistent earnings beats would have caused the stock to spike.

However, the opioid crisis has taken center stage for Endo, Teva (TEVA), Mallinckrodt (MNK), Johnson & Johnson (JNJ). There are several unknowns about Endo’s ultimate liability for opioid litigation or when it will be resolved. The market does not like uncertainty, hence, this explains why ENDP is well below where it traded prior to the pandemic. The so-called “opioid overhang” caused ENDP to hover below $5 dollar per share for about four years. The company’s fortunes took a turn for the better last when its cellulite treatment, Qwo, was approved by the FDA. Qwo was supposed to be launched in the second half of 2020, but was delayed until April due to the pandemic. Endo’s Q2 report will be the first time Qwo’s financial results will be divulged to investors. This blockbuster treatment has won rave reviews thus far. I estimate that Qwo, standalone, is worth about $35 per share, over 8x where ENDP currently trades. Read more:



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