Endo International (ENDP) plunged as much as 28% in after-hours trading after the company missed on earnings, reduced 2016 guidance and made changes to its board and leadership. Put simply, the company gave investors a lot of news to digest and they fled.
Endo is a global specialty pharmaceutical company that develops both branded and generic products as well as over-the-counter medications.
For the first quarter, the company reported a GAAP-loss of $0.40 a share, down from earnings of $0.85 a share in the first quarter of 2015. Analysts were projecting earnings of $0.11 a share. Revenue of $963 million just beat analyst projections of $956 million.
What got investors most anxious, though, were cuts to 2016 guidance. The company is targeting revenue to fall between $3.87 billion and $4.03 billion, down from a range of $4.32 billion to $4.52 billion, announced in March. The company also expects earnings for the full year to fall between $0.25 and $0.55 per share, down from previous projections in the range of $2.25 to $2.60, representing a nearly 85% cut to earnings guidance.
"As we move further into 2016, we are rebasing our full-year financial expectations due to the impact of several previously unanticipated headwinds: new competitive entrants, including for Voltaren Gel; greater-than-expected price erosion across the generics sector; and delays on regulatory actions related to certain Endo products," CEO Rajiv de Silva said in the company's earnings release.
In separate releases, the company also announced changes to its board and management structure. Douglas Ingram, who was formerly president of Allergan (AGN), was named to the board, as was Todd Sisitsky, a managing partner of TPG Capital. (TPG Capital, a private equity firm, has a 7.7% stake in Endo, according to data provided by Thomson Reuters.) Endo also announced that Brian Lortie, president of U.S. branded pharmaceuticals, will be stepping down from his position once a successor is found.
"We are also continuing to evolve Endo's corporate strategy and are taking decisive action to best position the company for a return to long-term, organic growth within a rapidly changing market environment," de Silva said. "We look forward to executing on this evolved strategy to deliver products that improve patients' lives while creating value for our shareholders."
Investors, however, are not seeing the value.