Endo (ENDP) tanked to the bottom of the SP 500 Monday, with shares falling 21% off news that the Irish drugmaker is selling its ASTORA Women’s Health division.
The company posted strong quarterly earnings, with adjusted earnings per share of $1.36 topping Wall Street forecasts by nearly 7%, as sales of $1.1 billion were roughly in line with expectations, based on Bloomberg consensus data.
But investors viewed the sale of health division as a dismal sign for the beleaguered drug maker, which has lost more than half of its market cap over the past 12 months, especially over pending litigation over nearly 22,000 claims of defective mesh products.
“We have also recently become aware of what we believe may be fraudulent or other wrongful activities relating to the generation of certain mesh claims,” CFO Suketu Upadhyay said on Monday’s earnings call with analysts. “While we do not yet know the scope of such activities, we plan to fully investigate them, and if appropriate, will vigorously pursue all available remedies against each responsible party and cooperate with law enforcement authorities, other mesh manufacturers, and the court.”
Meanwhile, natural gas producer Consol Energy (CNX) led the index , with a more than 10% gain Monday off the closure of a Virginia coal mine for roughly $420 million.
Investors appeared delighted by news of the proposed sale, which hopefully could free up cash to pay down a mounting debt load of $3.7 billion, based on its fourth quarter filing.
Valeant Pharmaceuticals (VRX) was also rattled in late-day trading, after Bloomberg published a report that the struggling pharmaceuticals company is being investigated by the Securities and Exchange Commission.
As Real Money reported, Valeant shareholders have recently taken a hit over news that its annual earnings results were postponed, suggesting worse-than-expected results tied to accounting misstatements over its combination with specialty pharmaceuticals distributor Philidor.
The broader index ticked down about 1% on the day, while crude prices jumped more than 3% to $33.86, based on U.S. benchmark West Texas Intermediate.