Will Endo's 'hard' pill save opium profits?

Endo Pharmaceuticals, West Chester-based maker of Percocet, Percodan and other big-league painkillers, is trying to "protect a good portion of the franchise from generic competition for at least several more years" with a new version of opium-based (oxymorphone) Opana ER, "a harder pill that is very difficult to crush or dissolve" by drug abusers seeking to unlock the time-release and get a quick hit, writes Gary Nachman, drug analyst at Bala Cynwyd-based Susquehanna International Group LLP, in a report to clients today.

Drugmaker Purdue Pharma LP recently won a similar approval for a "hard-shell" and 
tamper-resistant" version of its often-abused OxyContin. Nachman says hard pills are more effective at baffling drug abusers than rival technologies relying on chemical additives, and that FDA has said further testing for the new Opana isn't needed.

Endo sold $240 million of Opana last year and expects prescriptions to grow to around $300 million this year and for the next couple of years until generics and newer rivals trim its sales.

But Nachman also "cautioned against jumping to the conclusion" that FDA will give final approval very soon. If FDA does approve hardened Opana early this winter - "roughly a 40% chance" - Nachman predicts "the stock could be up $2-$3 a share."