×

UPDATE 2-Endo's U.S. generics business beats estimates

(Adds details, analysts' comments; updates shares)

Aug 8 (Reuters) - Endo International Plc reported quarterly sales in its U.S. generic business that outperformed expectations, bucking the trend of other generic drugmakers that have succumbed to continuing pricing pressure.

However, Dublin, Ireland-based Endo's shares fell about 3.5 percent to $8.98 in early trading on Tuesday.

Endo's surprising results come a week after the world's largest generic drugmaker Teva Pharmaceutical posted a steeper-than-expected drop in second-quarter earnings, hurt by accelerated price erosion in the United States.

Rivals Mylan and Perrigo are both expected to announce quarterly results this week.

Endo reported sales of $563.3 million in its U.S. generics business in the second quarter ended June 30, ahead of the consensus estimates of $525 million.

Excluding items, Endo earned 93 cents per share, handily beating Thomson Reuters I/B/E/S estimates by 20 cents.

"The beat was driven by strong performance in the generics business that we believe will keep Endo on the short list of consolidation candidates," Mizuho analysts said in a client note.

Total revenue fell 4.9 percent to $875.7 million, but came in ahead of analysts' estimate of $836.4 million.

"The quarter was solid against low expectations with what we think is continued...conservatism but the reality is cash flow generation...will remain the primary focus in the stock over the near-term," RBC's Randall Stanicky said in a note.

Endo, however, lowered its full-year revenue forecast to $3.38 billion to $3.53 billion from $3.45 billion to $3.60 billion.

It now expects 2017 adjusted profit from continuing operations to be between $3.35 per share and $3.65 per share from $3.45 per share and $3.75 per share.

The updated forecast reflects in part the withdrawal of Endo's opioid painkiller Opana ER. Endo agreed to pull the drug in early July after the U.S. Food and Drug Administration took the rare step of asking for the withdrawal, citing the burgeoning opioid epidemic.

Endo also said later in July it would close its Huntsville, Alabama, facility and cut its workforce by 875 positions.

Separately on Monday, Endo said it reached agreements to resolve its long-standing mesh product liability claims by increasing its reserve by $775 million and making payments from the fourth quarter through the last quarter of 2019.

The lawsuits stem from tens of thousands of women who allege injury from the vaginal mesh devices.

Teva's shares were up about 2.5 percent, while Mylan also rose marginally in early trading on Tuesday.

(Reporting by Akankshita Mukhopadhyay and Manas Mishra and Writing by Natalie Grover; Editing by Martina D'Couto)