Endo Health Solutions, Inc. (ENDP) Q2 2012 Earnings Conference Call August 07, 2012, 08:30 a.m. ET Executives Blaine Davis - SVP, Corporate Affairs Dave Holveck - President and CEO Julie McHugh - COO Ivan Gergel - EVP, Research & Development and Chief Scientific Officer Alan Levin - EVP and CFO Analysts Marc Goodman - UBS Ken Cacciatore - Cowen and Company Shibani Malhotra - RBC Capital Markets Gregg Gilbert - Bank of America/Merrill Lynch Corey Davis - Jefferies and Company Annabel Samimy - Stifel Nicolaus Trevor Davis - Piper Jaffray Mike Faerm - Credit Suisse Chris Schott - JP Morgan Gary Nachman - Susquehanna Financial Group Greg Waterman - Goldman Sachs Presentation Operator
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After our prepared remarks, we will open the call to take your questions. I’d like to remind you that any forward-looking statements by management are covered under the Private Securities Litigation Reform Act of 1995 and subject to change, risks and uncertainties described in today’s press release and in our filings with the SEC.In addition, during the course of this call, we may refer to non-GAAP financial measures that are not prepared in accordance with accounting principles generally accepted in the United States and that may be different from non-GAAP financial measures used by other companies. Investors are encouraged to review Endo’s current report on Form 8-K filed with the SEC for Endo’s reasons for including those non-GAAP financial measures in its earnings announcement. The reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is contained in our sales and earnings press release issued earlier this morning. Now I’d like to turn the call over to Dave. Dave Holveck Thank you, Blaine. Endo had a very solid second quarter with revenues of 785 million and adjusted earnings of $1.27 per share, these results reflect a number of variables affecting our business, including the resolution of previous short-term supply constraints, improved pricing for Qualitest products following a sales shift to higher margin products as well as a lag in prescription and pharmacy restocking for OPANA ER following the first quarter supply interruption. We will make a number of efforts to increase sales of the new formulation of OPANA ER and adjusting our revenue guidance for the year to the range of $3.05 billion to $3.175 billion due to largely reflect the slower recovery effort. Sales of Voltaren Gel and generics have been very strong and partially offset the OPANA ER disruption. In addition we will focus on further improving our operating efficiency during second half of 2012. And as a result we are maintaining our previous guidance for adjusted diluted earnings per share of $5 to $5.20. Alan will say more about our guidance in a few minutes.
There are several positive developments I’d like to highlight. In May we resolved our litigation with Watson regarding Watson’s generic form of LIDODERM and eliminated a significant uncertainty. The settlement protected our intellectual property interest and avoided further cost litigation and the risk inherent to litigation. Most important the settlement requires Watson to obtain FDA approval of its generic version before it can enter the market.In addition, the settlement allows us to prepare for the potential launch of the generic lidocaine patch with greater certainty. We manage that event that we expect no sooner than late 2013 if at all. Last month, we announced the appointment of Camille Farhat as President of American Medical Systems. This was a significant development for our medical device and procedure business. Camille brings a very strong background in pharmaceutical and medical technology including exceptional operating, marketing and leadership skills from his previous work at Baxter, Medtronic and GE Healthcare. He has demonstrated an ability to focus on the needs and concerns of patients and to leave complex and competitive global business and have confident it can apply his expertise effectively at AMS. The recent rebranding of parent company Endo Pharmaceuticals to Endo Health Solutions is helping our organization focus on therapeutic areas and disease states as pathways not just product opportunities. This rebranding is reflection of a business philosophy that will be the key to our long-term success as we work to expand the value proposition with all of our customers. We built relationships with approximately 70% of the 10,000 U.S. based [urologist]. And that complements our presence in pain or we have relationships with the vast majority of the U.S. based pain specialist that we believe have higher value. We believe that our remaining focus in urology and pain, therapeutic areas that are supported by the ageing demographics, Endo can fill the business with strong prospects for long-term growth.
And finally, I’d like to comment Ivan Gergel’s R&D organization as well as our development partners at BioDelivery Sciences International. Just announced the initiation of the Phase 3 development program for BEMA Buprenorphine in the treatment of moderate to severe chronic pain. And we look forward to providing updates this is potential driver of future growth progresses in its development program.Read the rest of this transcript for free on seekingalpha.com