Endo Pharmaceuticals ReEvaluation

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Endo PharmaceuticalsRe-Evaluation

• Analyst Renae Guida
• January 23, 2008

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Current Stock Price

• 23.74
• 52-Week Range
• 35.85-23.74
• Market Cap
• 3.30 Billion
• Currently hold 60 shares in IMP Portfolio

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Ratios

• Slight increases and decreases but no significant
  changes
• Still meets criteria

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Portfolio Impact

• We currently own TEVA
• I believe this is a better stock and has
  consistently outperformed ENDP
• Only 2.17 of total portfolio weight
• Does not have a significant impact on overall
  portfolio
• Already have 18.94 invested in the Healthcare
  Sector

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Industry Overview

• Healthcare issues are up in the air with the
  current presidential election in the near future
• Healthcare costs are expected to increase
• Branded pharmaceutical costs are increasing
• Generic sales are slowing
• Bio-tech drugs are picking up the slack as
  mainstream drugs age

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News

• Hit 52 week low today
• Jan 7-Endo Pharmaceuticals said it expects 2008
  earnings to rise 17 percent from its 2007
  estimates, driven primarily by its patch
  treatment for shingles-related pain.
• The company expects earnings of 2.10 to 2.15 a
  share and net sales of 1.22 billion to 1.24
  billion
• Analysts were expecting the company to earn 2.11
  a share

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Future..

• ENDPs priority for 2008 is to enhance their
  overall portfolio, including expanding their
  pipeline by making significant investments in new
  product opportunities
• They are also looking forward to benefiting from
  the infrastructure enhancements they made in 2007
  to help promote strong growth, not only this year
  but over the long term

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Opinion

• Stock is in downtrend
• Under performing compared to other stocks in the
  sector
• No real reason to keep 2 stocks (TEVA ENDP) in
  the same industry when one is consistently
  outperforming the other
• Suggestion
• Wait to see if stock price increases to about
  25-26 and sell
• Sell ENDP _at_ say 25.50 of 60 shares 1530
• Buy 33 shares of TEVA at 45.88 with the ENDP
  1530