Key points:
- The Endo International (ENDP) stock price rallied 15% after the trial win.
- However, the firm is still precarious due to the opioid settlements.
- So should you buy ENDP stock? Read on to find out.
The Endo International PLC (NASDAQ: ENDP) stock price rallied 14.9% after the jury ruled in its favour in a class-action lawsuit by purchasers of its Opana ER. The company’s accusers claimed it had made an illegal deal with Impax Laboratories to delay the release of a generic version of the opioid drug.
Today’s win did not result in a significant rally in Endo International’s stock price since the pharmaceutical company had won a similar lawsuit brought by the Federal Trade Commission (FTC) in March this year.
Also read: Five Best Pharmaceutical Stocks To Watch In 2022.
The jury ruled in Endo’s favour, given that the deal with Impax was signed in 2010 after Endo sued it for applying with the US Food & Drug Administration to start marketing a generic version of Opana ER. Impax claimed that the application infringed on its two patents covering controlled-release drug formulations set to expire in 2013.
The jury ruling provides significant relief to Endo International, given that it has already agreed to pay approximately $300 million in opioid settlement claims with various state and local governments for contributing to the opioid pandemic in the United States.
Endo paid Impax Laboratories $102 million after sales of Opana ER fell significantly in 2012 after the company switched to a crush-resistant form of the drug. The two companies had agreed that Endo would pay Impax if Opana ER sales fell below a specific threshold, which they did in 2012.
From a technical perspective, Endo International shares have fallen over 94.7% from their February 2021 highs of $10.87 to their current lows of $0.57.
Can the Endo International stock price recoup its losses? The short answer is yes, ENDP shares can recoup their losses. However, this seems like a tall order, given the massive drop in ENDP’s stock price.
The first positive catalyst for ENDP’s stock recovery would be the finalisation of the opioid-related payments that are weighing on the company. Endo’s market capitalisation has shrunk to a mere $134.7 million compared to 2021, threatening its existence.
The pharmaceutical company is in danger of going bankrupt if it cannot meet its debt obligations, and its low stock price and valuation will make it difficult for the firm to raise new funding. Therefore, I would not buy ENDP stock under the current circumstances.
*This is not investment advice. Always do your due diligence before making investment decisions.
Endo International stock price.
The Endo International stock price surged 14.89% to trade at $0.655, rising from Friday’s
