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Endo (ENDP) to Remove Opioid Pain Drug Opana ER from Market

Endo International plc ENDP recently announced that it will withdraw opioid pain medication Opana ER (oxymorphone hydrochloride extended release) from the market following FDA’s request in June.

In Mar 2017, the FDA Drug Safety Risk Management and Anesthetic and Analgesic Drug Products Advisory Committees voted in the ratio of 18 to 8 and consented that reformulated Opana ER did not outweigh public health risks.

The FDA asked the Advisory Committees to discuss the pre- and post-marketing data about the abuse of Opana ER as well as the product's overall risk-benefit profile. The abuse of generic oxymorphone ER and oxymorphone immediate-release (IR) products were to be evaluated as well. Few members stated that the benefits are now overshadowed by the continuing public health concerns around the product's misuse, abuse and diversion.

Thereafter, the FDA directed the company to remove the drug from the market in Jun 2017. The move comes in wake of the widespread opioid abuse epidemic.

Opana ER is an opioid agonist indicated for the management of pain severe enough to require daily, around-the-clock, long-term treatment and for which alternative treatment options are inadequate.

In Dec 2011, the FDA approved a new formulation which had the same dosage strengths, color and packaging. Also, the tablet’s size remains the same as the original.

Consequently, the company expects to incur a pre-tax impairment charge of approximately $20 million in the second quarter of 2017 to write-off the remaining net book value of its drug. Sales of the drug were $158.9 million for 2016 and $35.7 million for the first quarter 2017.

Hence, withdrawing the drug from the market will advserly impact the topline. Nevertheless, Endo continues to believe in safety, efficacy and favorable benefit-risk profile of OpanaER.

Following the news, the company’s shares declined 1.9%. Shares of Endo have underperformed the Zacks classified Medical-Drugs industry year to date. The stock was down 32.6% compared with the industry’s gain of 5.9%.

Zacks Rank and Stocks to Consider

Endo currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the healthcare sector include Enzo Biochem, Inc. ENZ, Sanofi SNY and Merck & Company, Inc. MRK. While Enzo Biochem sports a Zacks Rank #1 (Strong Buy), Sanofi and Merck carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Enzo Biochem’s loss estimates have narrowed from 12 cents to 7 cents for 2017 and from 11 cents to 3 cents for 2018 over the last 30 days. The company delivered positive earnings surprise in the last four quarters, with an average beat of 55.83%. The company’s shares have moved up 62.1% so far this year.

Merck’s earnings estimates have remained unchanged for 2017 and moved up from $4.16 to $4.18 for 2018 over the last 30 days. The company delivered positive earnings surprise in the last four quarters, with an average beat of 4.36%.

Sanofi’s earnings estimates have moved up from $3.08 to $3.18 for 2017 and from $3.26 to $3.30 for 2018 over the last 60 days. The company posted positive earnings surprise in two of the last four quarters, with an average beat of 5.10%. The company’s shares have gained 16.7% so far this year.

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