Endo International (ENDP 66.67%) stock was cratering on Friday, with shares falling 31.6% as of 11:49 a.m. ET. The sharp sell-off came after the drugmaker announced its first-quarter results following the market close on Thursday.
The company reported Q1 net revenue of $652.3 million, down 9% year over year. This result was in line with the consensus estimate.
Endo posted adjusted earnings in the first quarter of $155.9 million, or $0.66 per share. The average analysts' estimate was for net income of $0.44 per share.
Why did the pharma stock sink after beating Q1 estimates? Endo's guidance for the second quarter disappointed investors in a major way.
The company projects Q2 revenue between $500 million and $525 million. That's nowhere close to the consensus estimate of $655.6 million. Endo also anticipates a Q2 adjusted net loss per share between $0.17 and $0.15. Analysts were looking for positive adjusted earnings of $0.48 per share.
Endo CEO Blaise Coleman acknowledged "challenging market dynamics" for Vasostrict with the drug losing exclusivity. The company's sterile injectable sales fell 22% year over year in the first quarter due primarily to generic competition for Vasostrict.
It seems likely that Endo could continue to face stiff competition on several fronts throughout this year. There are so many uncertainties that the company didn't provide guidance beyond the second quarter.
However, Endo could have brighter prospects in the future. The company plans to initiate a new clinical study of Qwo this quarter that could pave the way for expanding its use in treating cellulite. Endo also recently acquired six injectable pipeline candidates from Nevakar. The first commercial launch from these programs could be on the way in 2025 if all goes well.