Endo Pharmaceuticals Holdings Inc. (ENDP) recently announced a change in its management team. The company announced that Mr. Tony Bihl, the man at the helm of Endo devices operating company (a wholly-owned subsidiary of Endo Pharmaceuticals Holdings), will quit in July 2012. Endo Pharma is currently on the lookout for Mr. Bihl’s successor.

Mr. Bihl joined Endo Pharma in June 2011 following the purchase of pelvic health company, American Medical Systems, in the capacity of group president. Mr. Bihl was the president and chief executive officer of the erstwhile American Medical Systems from April 2008 until its acquisition by Endo Pharma. He had also worked with Bayer (BAYRY).

We note that the Devices unit at Endo Pharma aims at providing technology solutions to doctors regarding conditions related to the pelvic health of patients. The segment has the following sub-groups: men’s health, women’s health, and benign prostatic hyperplasia (BPH) therapy. Revenues from device sales came in at $142.0 million in the final quarter of 2011.

We remind investors that the purchase of American Medical Systems was the fourth major acquisition by Endo Pharma since 2010 as it is on an acquisition/deal signing spree to expand its business. Endo Pharma completed three major acquisitions in 2010 – Qualitest Pharmaceuticals, Penwest Pharmaceuticals Co. and HealthTronics Inc.

The deal signing spree continued in 2012. In March 2012, Endo Pharma joined hands with Mersana Therapeutics Inc. for the development of next-generation antibody-drug conjugates. Moreover, in January 2012, the company inked a global license and development agreement with BioDelivery Sciences International (BDSI) regarding the latter’s pain candidate BEMA buprenorphine currently undergoing late-stage development. We believe that these acquisitions/deals are steps in the right direction and would help counter the generic threat faced by the company.

Our Recommendation

Currently, we have a Neutral stance on the stock in the long run. The company carries a Zacks #3 Rank (Hold rating) in the short run.

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