Endo Health Solutions (ENDP) shares popped more than 17% last week on rumors of exploratory talks with potential buyers including Valeant (BHC -2.76%) and Warner Chilcott (NASDAQ: WCRX). This week, Bloomberg reported that the push to sell might come from Fidelity Investments -- Endo's largest shareholder.

It's best to take sale rumors with a bag of salt. But here's a look back at the tough year that left Endo in a more vulnerable position.

String of bad news
Branded pharmaceuticals made up the majority of Endo's revenues last year. In the third quarter, the pain patch Lidoderm accounted for 32% of overall revenues and over half of its segment. The bad news? Lidoderm's patent expired last fall. An expensive patent battle with Actavis (AGN), formerly Watson, delayed the generic release but only until this September .

Opana ER earned the second slot in the branded drug department, accounting for 8% of overall revenues that quarter following a 36% slip due to a supply issue. Endo replaced the original formula with a crush-resistant formulation that's harder to abuse. The company later sued the FDA  to try and prevent generic alternatives from entering the market, claiming that their non-tamper-resistant nature posed a safety risk to patients. But a court dismissed the case and opened the path for generics.

In December, Endo announced that CEO David P. Holveck plans to step down this spring, and a search for a replacement is still under way. The company used the same press release to lower its 2013 forecast to include EPS of $4.40 to $4.70 per share and revenues of $2.80 billion to $2.95 billion. That's down from the month-prior prediction with an EPS of $5.20 to $5.40 per share and revenues of $3 to $3.02 billion.

Bright spot
Endo has more happening than Lidoderm and Opana ER. The generic drug subsidiary Qualitest held 22% of overall revenues in the third quarter and future growth here could offset a bit of the losses from pharmaceuticals. Qualitest launched a generic for Merck's asthma medication Singulair last summer and later received FDA approvals for generic versions of Avapro and Provigil. The generics market tends to be competitive with low margins.

Foolish final thoughts
Endo's in limbo right now. Its value as a buy would vary depending upon the purchaser. And its future as a solo company could change depending on the CEO who fills the upcoming vacancy.