What: Endo (ENDP) is down 17% at 12:50 p.m. ET after releasing fourth-quarter earnings this morning.

So what: With that kind of drop, you'd expect that the drug company had missed guidance substantially, but that wasn't the case.

Fourth-quarter revenue came in at just over $1 billion -- up 62% year over year thanks to the addition of acquisition of Par Pharmaceutical -- which put the full-year revenue toward the top end of the company's guidance. And the full-year adjusted diluted EPS of $4.66 exceeded the top end of its guidance.

It's hard to see how the guidance for this year would be upsetting investors that much, either. Management said to expect revenues to be between $4.32 billion and $4.52 billion, up at least 32% year over year at the low end. And adjusted EPS are expected to be between $5.85 and $6.20, up 25% at the low end.

The big issue seems to be the fact that Endo decided not to sell its ASTORA Women's Health division and instead plans to shut down the operation. It's not the lost revenue that's the issue -- the division will shut down by the end of March, so the aforementioned guidance takes that into account -- but the potential for future lawsuits from the mesh implants the company sold.

Now what: The risks from lawsuits over the mesh implants were already known -- many have already been settled -- but Endo threw fuel on the fire when the company said it's shutting down ASTORA to avoid a bigger legal bill later on.

Investors often overreact on legal issues, but who can blame them; if you're not a lawyer -- and maybe even if you are -- it can be really hard to gauge the potential risk for a large legal bill. At some point, Endo becomes a good buy even with the legal risk, but without knowing the potential risk, it's hard to set that price.