Endo International Enters Agreement To Buy Par Pharma For $8 Billion

The pharmaceutical industry saw another M&A bump this morning when Endo International said it entered into an agreement to purchase Par Pharmaceuticals for $8.05 billion.  Under the deal, shareholders of the private company, Par Pharmaceuticals, will receive $6.5 billion in cash and 18 million Endo International shares.  The new company will be the fifth largest generic pharmaceutical maker in the US by sales.

New powerhouse to have generic and specialty pharmaceutical pipeline

Endo International is a relatively small company that is based in Ireland and has its US headquarters in Malvern, PA, has 5,000 employees on payroll, and saw revenue results of $2.88 billion in 2014.  Par Pharmaceuticals on the other hand is based in New York and was taken private by TPG Capital in 2012.  Par Pharmaceuticals employs around only 1,600 people and saw revenues of $1.31 billion in 2014.  “This is an exciting time of growth and opportunity in the generics and specialty pharmaceutical arenas,” says Par Pharmaceuticals CEO, Paul Campanelli. Campanelli will join Endo International once the buyout is complete and he will remain in charge of former Par Pharma assets in the new generics division.

Michael Mauboussin: Here’s what active managers can do

michael mauboussin, Credit Suisse, valuation and portfolio positioning, capital markets theory, competitive strategy analysis, decision making, skill versus luck, value investing, Legg Mason, The Success Equation, Think Twice: Harnessing the Power of Counterintuition, analysts, behavioral finance, More Than You Know: Finding Financial Wisdom in Unconventional Places, academics , valuewalkThe debate over active versus passive management continues as trends show the ongoing shift from active into passive funds. Q2 2020 hedge fund letters, conferences and more At the Morningstar Investment Conference, Michael Mauboussin of Counterpoint Global argued that the rise of index funds has made it more difficult to be an active manager. Drawing Read More

Endo International posts mixed first quarter results earlier this week

On May 11th, Endo International released first quarter 2015 earnings results of earnings per share of $1.17 on revenue of $714.1 million.  Analysts were looking for earnings per share of $1.07 and revenue of $722 million.  Endo International’s US branded drug sales saw an increase of 21% year over year to $285 million, generic drug sales rocketed up 68% year over year to $357 million and International Pharmaceuticals saw sales of only $72.7 million.  Full year guidance for 2015 earnings per share is expected to come between $4.40-$4.60 and revenue is estimated at coming in between $2.90 billion and $3 billion.

Endo International

Overall, Endo International posted very strong gains year over year for its US branded drugs and generic drugs. This boost helped increase full year guidance and now, with the purchase of Par Pharmaceuticals, Endo International stands to become further disrupting force in the pharmaceutical industry, particularly generics.  For now, Endo International must continue to focus on absorbing Par Pharmaceuticals and using the new assets to further take market share away from rivals, particularly in the US and generic drug markets.

Disclosure: None