Endo Health Solutions (NSDQ:ENDP) said its pelvic mesh products are under investigation by the attorneys general from several states including California.
The Malvern, Pa.-based healthcare giant, which acquired thousands of product liability lawsuits over the mesh devices when it paid $2.9 billion for American Medical Systems in 2011, said the office of California AG Kamala Harris served it with a subpoena last November. Subpoenas from an unspecified number of other state AGs followed, according to a regulatory filing.
"We are cooperating fully with this investigation," Endo Health said in a regulatory filing.
Endo, which booked a $500 million writedown on the value of its AMS assets earlier this month, agreed to a $55 million settlement of filed and pending product liability lawsuits over the transvaginal surgical mesh products. After the FDA in 2008 warned of possibly severe health consequences associated with the devices, designed to treat pelvic organ prolapse and stress urinary incontinence, thousands of plaintiffs filed suit against Endo and several other mesh makers.
Endo said it paid out the 1st $43.0 million from the escrow account created by the settlement, which did not include an admission of guilt or liability.
Revenues for the AMS subsidiary were down for the 4th quarter and 2013, the company said. Sales were $132.4 million during the 3 months ended Dec. 31., 2013, down 0.4%; AMS revenues were down 2.4% to 492.2 million last year, according to a separate filing.
The overall numbers were also down for Endo, largely due to the AMS writedown and a $316 million addition to its legal reserve. Fourth-quarter losses were -$775.9 million, or -$6.74 per share, on sales of $584.9 million, meaning a 6.1% increase in losses on a -22% sales decline. Adjusted to exclude, 1-time items, earnings per share were 96¢, 3¢ ahead of expectations on The Street.
Full-year losses decreased by 7.4%, to -$685.3 million, or -$6.05 per share, on negative sales growth of -7.1% to $2.62 billion.
Endo Health said it expects to post EPS of $1.36-$1.81 and adjusted EPS of $3.40-$3.65 on sales of $2.50 billion to $2.62 billion during 2014. Analysts were looking for adjusted EPS of $4.01 on sales of $2.59 billion.
ENDP shares were down 1.6% to $78.56 apiece as of about 11 a.m. today.
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