Earnings call transcript: Endo Inc Q2 2025 sees merger and sales growth

Endo Inc reported its second-quarter 2025 earnings, highlighting the completion of a merger with Mallinckrodt and notable sales growth in certain product lines. The company posted a net income improvement from a loss of $43 million in the previous year to a profit of $2 million. Acthar Gel sales surged significantly, contributing to a positive outlook despite some declines in other areas. The stock closed at $23.59, reflecting a 2.12% increase. According to InvestingPro data, the company maintains a "GOOD" overall Financial Health Score of 2.85, with particularly strong marks in profitability and price momentum metrics.

Key Takeaways

• Endo Inc completed its merger with Mallinckrodt on July 31, 2025.
• Acthar Gel sales rose by 49% in Q2, boosting overall performance.
• The company reported a net income of $2 million, up from a loss last year.
• The stock saw a 2.12% increase, closing at $23.59.
• Endo Inc plans a spin-off of Par Health and aims to list on the NYSE.

Company Performance

Endo Inc demonstrated resilience in Q2 2025, with significant growth in specific product lines such as Acthar Gel, which saw a 49% increase in sales. This growth helped offset a 6% decline in legacy Mallinckrodt net sales. The merger with Mallinckrodt is expected to generate $150 million in annual pretax synergies by year three, with $75 million anticipated in the first 12 months post-merger.

Financial Highlights

• Revenue: $933 million, with legacy Endo contributing $448 million and legacy Mallinckrodt $485 million.
• Net income: $2 million, compared to a $43 million loss in Q2 2024.
• Acthar Gel sales: $175 million, up 49% year-over-year.

Outlook & Guidance

Endo Inc has raised its guidance for Acthar sales, now expecting growth between 20% and 30%. The company is focusing on the integration of its recent merger and realizing synergies. Additionally, the planned spin-off of Par Health and listing on the NYSE are key strategic initiatives. The stock has seen a YTD decline of 3.71% and trades near its 52-week range of $19.85-$31.40. InvestingPro subscribers can access detailed valuation metrics and expert analysis to evaluate the potential impact of these strategic moves.

Executive Commentary

Siggi, CEO of Endo Inc, stated, "The new Malin Craft combines two organizations with rich legacies of innovation." He also expressed optimism about the company’s future, saying, "The future of our combined company is bright."

Risks and Challenges

• Market competition in generics remains stable but challenging.
• Integration of Mallinckrodt could face operational hurdles.
• Economic pressures and regulatory changes could impact future performance.
• Maintaining sales growth in declining segments like INOMAX in the US.

Q&A

No questions were asked during the earnings call, indicating a straightforward presentation of results and strategy.

Full transcript - Endo Inc (NDOI) Q2 2025:

Conference Operator: Ladies and gentlemen, thank you for standing by, and welcome to MellanCrod’s Second Quarter twenty twenty five Results Conference Call. At this time, all lines are in a listen only mode. Following the presentation, we will conduct a question and answer session. Please note, this event is being recorded. I will now turn the call over to Gerard Mucener to cover forward looking statements.

Please go ahead.

Gerard Mucener, Legal/Compliance Representative, MellanCrod: Thank you and welcome everyone. Before we begin, let me remind you that we will make forward looking statements on this call. And it’s possible that actual results could be materially different from our stated expectations. Please note these forward looking statements are made as of today and we assume no obligation to update them even in the event of new information or actual results or future expectations change materially except as required by law. We encourage you to refer to the cautionary statements contained in our SEC filings for a more in-depth explanation of the current limitations of such forward looking statements.

We will also provide select non GAAP adjusted measures related to our financial performance on this call. A reconciliation of these non GAAP measures is included in our earnings release, which can be found on our website, www.mnkendo.com. We use our website as a channel to distribute important and time critical company information and you should look to the Investor Relations page of www.mnkendo.com for this information. As noted in our earnings release, the second quarter for Legacy Mallinckrodt ended on 06/27/2025. And the second quarter for Legacy Endo ended on 06/30/2025.

Additionally, unless otherwise specified for legacy MountainCrop results, the net sales percentage changes we discussed will be on a constant currency basis. I’ll now turn the call over to Siggi.

Siggi, CEO, MellanCrod: Thanks, Gerard and good morning everyone. Just last week we completed the merger of Malacrot and Endo. And we are very excited to be speaking with you for the first time as a combined company. Today, we will cover the financial results of each legacy business for the 2025, which ended a few weeks before completion of the merger. I’m joined by the legacy CFOs of each business, Brian Reasons for Mallinckrodt and Mark Bradley for Endo.

They will walk you through the numbers and performance highlights from both standalone companies And then I’ll share our outlook for the combined company. Before we dive into the numbers, I’d like to start with an update on two subjects. Our merger and announcement this morning of our new President and CFO, Christiana Stamolis, as we announced this morning. As I mentioned, we were very pleased to announce the successful completion of a combination of Malacrotanendo on July 31. When we first announced the merger in March, we saw an extraordinary opportunity to combine two highly complementary pharmaceutical organizations and our excitement about what Malacrot and Endo can accomplish together has only grown since then.

Over the past few months, we have had a team dedicated to developing a comprehensive integration plan and preparing for our future as one organization. Through these efforts, we have seen how well our teams work together and how closely our cultures align. And we are starting this new chapter ready to hit the ground running. I’d like to thank the employees and leaders from both companies for their extraordinary efforts. We are now focused on executing on our vision for the future of our combined company.

And in that regard, I’m excited to announce that we have recruited Cristiana Stamolis, as our new president and CFO. Building a new organization requires not only bringing together the existing talent of both companies, but also bringing in a new talent with experiences and ideas different from our own. In that regard, we are really excited to have Christiana on board. She is an exceptional talent with deep experience in biotech, finance and strategy. And we are looking forward to the contributions she will be she will make to forging our new future.

The new Malin Craft combines two organizations with rich legacies of innovation, committed to accelerating the value creation we can deliver to our stakeholders. Our specialty brands portfolio spans a wide range of therapeutic areas of significant unmet need. And with durable on market products, we are well positioned for growth. We also have a strong balance sheet and meaningful financial flexibility to invest in innovation and business development. Our combined generics and sterile injectables business, which operates under the Par Health name, features a broad product portfolio, a leading controlled substances franchise, and best in class capabilities across the value chain.

With financing secured for the merger, and I should acknowledge the effort of our financing bankers led by Evercore, we are all well positioned to move forward with our planned spin off in the 2025, subject to our board’s approval and all the conditions. We are moving forward with urgency and energy to our full potential as a larger and more diversified company. And while we are in early days of executing our integration plans, we remain on track to achieve our synergy targets of generating at least $150,000,000 of annual pretax run rate operating synergies by year three and approximately $75,000,000 of pretax run rate synergies in the first twelve months post merger. Before turning the over the call, I want to emphasize that the strong financial results we are sharing today only reinforce my confidence in this combination. And what we can achieve as one organization.

On that note, I’ll flip the call over to Mark who will discuss legacy Endo’s financial results for the second quarter.

Mark Bradley, CFO (Legacy Endo), Endo: Thank you, Siggi. On behalf of the entire Endo team, I echo your remarks about our combination and how excited we are to move forward as one company. Turning to Endo’s second quarter twenty twenty five results, we are pleased to share that the company performed in line with Endo’s expectations for the quarter, which reflected a meaningful sequential increase from the 2025. Second quarter twenty twenty five total revenues were $448,000,000 flat compared to $446,000,000 in the 2024. However, excluding the international segment, which was divested in the second quarter, total revenues increased by approximately 2% in the 2025 compared to the 2024.

Second quarter twenty twenty five adjusted EBITDA was $150,000,000 compared to $176,000,000 in the 2024. This change was primarily driven by lower adjusted gross margin due to changes in product mix and continued investments in the Sterile Injectables manufacturing network. Second quarter twenty twenty five adjusted net income was $64,000,000 compared to $105,000,000 in the 2024. This change was primarily due to the decrease in adjusted EBITDA previously mentioned, coupled with an increase in interest expense. Turning to segment level performance, the Branded Pharmaceuticals segment reported revenues of $228,000,000 in the 2025 compared to $225,000,000 in the 2024.

This change was led by XIAFLEX and Supralin, which grew approximately 913% respectively in the 2025 compared to the 2024. XIAFLEX achieved another strong quarter driven by an increase in price and volumes associated with steady growth in underlying demand due to continued patient and healthcare provider education. Looking forward, we continue to see growth potential in diagnosis and treatment rates. The Sterile Injectables segment reported revenues of $87,000,000 in the 2025 compared to $91,000,000 in the 2024. This change was primarily driven by competitive pressures on ADRENALIN vials and VASOSTRICT.

It was only partially offset by increased revenues from the ADRENALIN ready to use bags and increased volumes across several other sterile injectable products. On a sequential basis, sterile injectables revenues increased 23% compared to the 2025. In the 2025, we expanded the adrenaline RTU bag product line with the addition of an eight milligram concentration to the existing four milligram concentration that was launched in the 2024. We also continue to advance sterile injectables pipeline and now have four FDA submissions through the end of the 2025. We continue to remain on track to complete seven FDA submissions and three product launches in 2025.

The Generic Pharmaceuticals segment reported revenues of $119,000,000 in the 2025 compared to $110,000,000 in the 2024. Revenues from the lidocaine patch grew 31% compared to the second quarter of twenty twenty four and thirty eight percent compared to the 2025, primarily driven by higher volumes as we continue to respond to market supply dynamics. The competitive landscape continues to remain relatively stable and our contract manufacturing partner continues to increase capacity to address growing market share. Finally, the International Pharmaceutical segment reported revenues of $13,000,000 in the 2025 compared to $21,000,000 in the 2024. This decline was the result of the previously announced divestiture of the international pharmaceuticals business.

It was completed on June 17. I will now turn the call over to Brian who will discuss Mallinckrodt’s second quarter results.

Brian Reasons, CFO (Legacy Mallinckrodt), Mallinckrodt: Thanks Mark. Legacy Mallinckrodt maintained our positive momentum, again delivering strong performance in the second quarter. VelanCraft’s net sales in the 2025 were $485,000,000 as compared to $514,000,000 in the 2024, reflecting a 6% decrease on a reported and constant currency basis, excluding the impact of the Therakos divestiture, total net sales grew by 9%. Net income for the 2025 was $2,000,000 an improvement from a net loss of $43,000,000 in the 2024. Adjusted EBITDA in the 2025 was $137,000,000 as compared to $174,000,000 in the 2024.

This was driven by strength in Acthar Gel, largely offset by the impact of the Therakos divestiture, incremental commercial investment for Acthar Gel and the impact of nitric oxide competition in The United States. Let’s take a closer look at legacy Mallinckrodt’s two business segments starting with Specialty Brands. Specialty Brands segment reported net sales of $264,000,000 as compared to $275,000,000 in the 2024. This 4% decrease includes the impact of the Therakos divestiture. Excluding Therakos, specialty brands net sales grew by 28%.

The primary driver of this growth was Acthar Gel, which generated net sales of $175,000,000 in the second quarter, an increase of 49% compared to the prior year period. This significant growth, which represents the highest growth for Acthar brand in more than a decade was driven by rising category awareness, prescriber base expansion and improved patient affordability. In addition, we’re nearly a year into the highly successful launch of our Self Jek device, which has been a strong growth driver for the brand. Enthusiasm for Self Jek has translated into strong referral rates with Self Jek now accounting for over 80% of all new Acthar referrals in the second quarter. We also saw growth across all therapeutic areas this quarter, a great indicator of momentum for Acthar Gel overall.

Turning to INOMAX, net sales were $62,000,000 in the second quarter, a decrease of 7% compared to the prior year period. The sales in The U. S. Continue to be impacted by competitive pressures. We’re pleased with the growth we saw in Japan, where sales increased 27% compared to the 2024.

Our multi year rollout of the EVOLVE DS delivery system into US hospitals continues to progress well. As of quarter end, we had more than 700 devices placed in over 80 hospitals nationwide. By the 2025, we expect that EVOLVE devices will be used to deliver the majority of nitric oxide INOMAX therapy in The US. TurboVaz generated net sales of $8,000,000 in the second quarter, an increase of 51% compared to the prior year period. This reflects 23% hospital demand volume growth versus the 2024 in line with our expectations.

We continue to believe in the opportunities ahead for this treatment as an important option for patients with HRS and their caregivers. Now moving to Specialty Generics. Specialty Generics segment reported net sales of $221,000,000 as compared to $240,000,000 in the 2024, a decrease of 8%. This year over year decline reflects a difficult comparison with the prior period and high demands for finished dose products driven by market constraints and shortages translated to peak sales volumes. Generics performance was impacted by competitive pressures on finished dose opioids and a path products, somewhat offset by strong performance and finished dose ADHD and addiction treatment product.

In API, we’re encouraged by signs of a turnaround in the APAP market, a positive indicator moving forward. I’ll now hand the call back to Siggi for the combined company’s 2025 financial guidance and some closing remarks.

Siggi, CEO, MellanCrod: Thanks, Brian. For 2025, we expect total company net sales to be between $3,570,000,000 to $3,620,000,000 and adjusted EBITDA between $1,100,000,000 and $1,130,000,000 For 2025, we expect Power Health net sales to be between $1,720,000,000 and $1,750,000,000 and adjusted EBITDA between $450,000,000 and $470,000,000. As a reminder, the guidance ranges for adjusted EBITDA do not include transaction related compensation expenses related to the merger. In terms of key products, we expect strength in performance to continue and accordingly, we are raising our 2025 net sales guidance for Acthar from a high single digit range to a 20% to 30% range. With XIAFLEX continued momentum and strong performance, we are reaffirming guidance for XIAFLEX revenues to grow in the high single digits in 2025.

As we think about the rest of the year, there’s a lot to look forward to. Our teams are already beginning to implement our integration plans and bring the benefit of this merger to life. We have also been encouraged by our conversation with our external stakeholders from investors to our partners in the healthcare community about their excitement for the merger. We will be announcing our new corporate name in the coming weeks. I’m following the planned spin off of Par Health.

The branded therapeutics company is expected to be listed on the New York Stock Exchange, subject to approval of our board of directors. Before we wrap up, I wanted to express my gratitude to the Mallinckrodt and Endo teams for the commitment and dedication to helping both companies to get to where we are today in terms of both today’s results and the completion of the merger. They have been instrumental to our collective success and I deeply thank everyone for their involvement and efforts today. The future of our combined company is bright and I’m confident in the value we can deliver to us shareholders, employees, customers and patients. And with that, I will now open it up for Q and A.

Conference Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you are using a speakerphone, please lift the handset before pressing any case. Once again, that is star one should you wish to ask a question.

Gerard Mucener, Legal/Compliance Representative, MellanCrod: It appears we do not have any questions. So we thank you all for joining us today. We look forward to engaging with you in the days and weeks ahead. If have you any questions, the best way to contact us will be by email, and we will work to get back to you as soon as possible. Thank you again for joining us.

Conference Operator: Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect your line.

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