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EI

Endo, Inc. (NDOI)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 revenue was $467.5M, down 6% year over year; GAAP EPS was -$4.59, Adjusted EBITDA was $163.9M, and Adjusted Net Income was $70.5M .
  • Branded segment held flat y/y at $246.9M, with XIAFLEX driving $147.9M; XIAFLEX volume rose ~8% y/y despite the prior-year one-time reserve reversal, highlighting resilient demand .
  • FY2025 guidance introduced numeric ranges: revenue $1.775–$1.860B, Adjusted EBITDA $620–$650M; assumptions include Adjusted Gross Margin ~64% and Adjusted OpEx $590–$610M .
  • Corporate catalyst: announced definitive agreement to combine with Mallinckrodt, targeting pro forma 2025 revenue of ~$3.6B and Adjusted EBITDA of ~$1.2B with at least $150M annual synergy run-rate by Year 3 .
  • No standalone Q4 earnings call transcript was published; the Company hosted a joint transaction call in lieu of its Q4 earnings call .

What Went Well and What Went Wrong

What Went Well

  • XIAFLEX hit a record $516M in 2024 (+9% y/y) and delivered $147.9M in Q4, with ~8% y/y volume growth; “We ended the year strong… XIAFLEX® annual revenues exceeding $500 million for the first time…” — Scott Hirsch, Interim CEO .
  • Adjusted gross margin improved y/y to 64.0% in Q4 (vs. 62.5% in Q4’23), supported by mix and cost actions .
  • Sterile Injectables execution: launched three products in Q4 including ADRENALIN ready-to-use (RTU) premixed epinephrine bags—the first FDA-approved manufacturer-prepared epinephrine premixed IV bag—bolstering pipeline and hospital RTU portfolio .

What Went Wrong

  • Sterile Injectables pressured by competition: segment down 4% y/y; VASOSTRICT down 41% y/y in Q4, partially offset by resolution of prior supply disruptions .
  • Generics down 20% y/y in Q4 (dexlansoprazole pressure); broader competitive headwinds persisted across multiple generic products .
  • GAAP results impacted by non-cash charges: asset impairment of $243.6M and higher interest/tax drove GAAP net loss of -$349.3M; operating cash flow fell to $30M vs. $115M in Q4’23 .

Financial Results

Consolidated P&L and Margins (oldest → newest)

MetricQ4 2023Q3 2024Q4 2024
Total Revenues ($M)$497.7 $426.5 $467.5
GAAP EPS ($)-$10.38 -$3.06 -$4.59
Adjusted Net Income ($M)$151.1 $62.0 $70.5
Adjusted EBITDA ($M)$166.3 $151.3 $163.9
GAAP Gross Margin (%)49.9% (5.1)% 13.9%
Adjusted Gross Margin (%)62.5% 67.4% 64.0%
YoY Revenue Change(6%) (6%) (6%)

Segment and Key Product Breakdown ($M) (oldest → newest)

Segment/ProductQ4 2023Q3 2024Q4 2024
Branded Pharmaceuticals$245.8 $217.2 $246.9
- XIAFLEX$147.8 $128.0 $147.9
- SUPPRELIN LA$23.5 $19.1 $25.7
Sterile Injectables$95.9 $80.1 $92.3
- ADRENALIN$24.3 $21.5 $24.1
- VASOSTRICT$22.0 $15.4 $13.0
Generic Pharmaceuticals$139.2 $110.8 $110.9
International Pharmaceuticals$16.9 $18.4 $17.5
Total Revenues, Net$497.7 $426.5 $467.5

KPIs and Balance Sheet

KPIQ4 2023Q4 2024
XIAFLEX Volume TrendOne-time ~$14M reserve reversal benefit impacted prior-year revenues ~8% volume growth y/y; $147.9M revenue
Operating Cash Flow ($M)$115 $30
Cash & Equivalents ($M)$777.9 $387.2
Asset Impairment ($M)$0.36 $243.6
Weighted Avg Diluted Shares (000s)235,220 76,156

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenues, Net ($M)FY2025“Low-single digit % growth” vs 2024 midpoint $1,775–$1,860 Updated to numeric range
Adjusted EBITDA ($M)FY2025“Mid to high-single digit % growth” vs 2024 midpoint $620–$650 Updated to numeric range
Adjusted Gross Margin (%)FY2025~67% (2024 expectation) ~64% Lower vs 2024 expectation mix
Adjusted Operating Expenses ($M)FY2025$595–$615 (2024 expectation) $590–$610 Slightly lower range
Segment Revenue Assumptions ($M)FY2025Not provided numerically Branded $895–$920; Sterile $360–$395; Generics $450–$475; International ~$70 Introduced segment ranges

Note: FY2025 guidance includes International Pharmaceuticals and will be updated after divestiture completion .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2, Q3)Current Period (Q4)Trend
XIAFLEX performanceQ2: $126.6M (+8% y/y), net price aided; volume +8% q/q . Q3: $128.0M (+13% y/y), strong demand .Q4: $147.9M; ~8% y/y volume, prior-year had ~$14M reserve reversal .Strengthening volume/demand .
Supply chain and injectablesQ3: temporary disruptions expected to resolve by YE’24 .Q4: disruptions resolved; portfolio added 3 launches incl. ADRENALIN RTU bags .Improving fulfillment and portfolio depth .
Capital structureQ3: repriced $1.5B term loan, -50 bps; ~$8M annual interest savings .Q4: higher interest expense vs prior year; mix impacts margins .Lower rate benefits, but interest burden elevated post exit financing .
Strategic transactionsQ2: introduced 2025 outlook; no M&A . Q3: focus on execution .Q4: definitive agreement to combine with Mallinckrodt; pro forma scale, synergies .Transformative combination to unlock scale/synergies .
R&D/clinicalQ3: CCH plantar fasciitis Phase 2 primary endpoint not met; subgroup signal .Q4: no new R&D data in release; continued pipeline realignment .Reassessment of R&D strategy; focus on branded growth .

Management Commentary

  • “We ended the year strong, with XIAFLEX® annual revenues exceeding $500 million for the first time and the successful launch of ADRENALIN® ready-to-use premixed bags,” — Scott Hirsch, Interim CEO .
  • ADRENALIN RTU premixed epinephrine bags: “The first-ever ready-to-use epinephrine premixed bag represents an advancement… provides greater workflow efficiency, saves time, and reduces the risk of medication error,” — Scott Sims, SVP & GM, Endo Injectable Solutions & Generics .
  • Competitive pressures acknowledged across generics and VASOSTRICT; adjusted margin improved due to segment/product mix .

Q&A Highlights

  • The Company did not publish a standalone Q4 2024 earnings call transcript; a joint transaction call with Mallinckrodt was hosted instead in lieu of the previously scheduled Q4 earnings calls, limiting available Q&A detail for the quarter .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable due to a mapping issue; therefore, we cannot present beat/miss analysis versus S&P consensus at this time. Values retrieved from S&P Global.*
  • Given the absence of S&P consensus, we highlight reported results only: revenue $467.5M, GAAP EPS -$4.59, Adjusted EBITDA $163.9M .

Key Takeaways for Investors

  • Branded momentum and XIAFLEX durability underpin core earnings power; Q4 volume rose ~8% y/y and 2024 XIAFLEX hit a record $516M, supporting FY2025 branded guidance of $895–$920M .
  • Mix and cost actions lifted adjusted gross margin to 64% in Q4; sustaining margin gains will hinge on portfolio mix and sterile/generics pricing dynamics .
  • Sterile Injectables competitiveness remains a watch item (VASOSTRICT -41% y/y), but RTU product innovation (ADRENALIN bags) and resolved supply issues should help stabilize trajectory .
  • Generics exposure continues to face structural price competition; segment guidance ($450–$475M FY2025) is calibrated for ongoing pressure .
  • Balance sheet and cash generation require monitoring: Q4 operating cash flow fell to $30M amid higher interest and taxes; term loan repricing reduces cash interest by ~$8M annually but post-exit financing costs remain elevated .
  • Strategic combination with Mallinckrodt is a material catalyst: expected scale, $75M Year 1 synergies and ≥$150M run-rate by Year 3 could reset earnings power and capital allocation flexibility .
  • Near term: focus on execution in branded growth, sterile launches, and synergy capture; medium term: combination-driven scale and portfolio breadth may improve durability and valuation if integration and separation plans (sterile/generics) proceed as envisioned .