Endo Shares Rise on Susquehanna Outlook

After jumping 5.1 percent earlier in the session, shares retreated a bit, adding 33 cents to $23.72 in midday trading. The stock has traded between $22.62 and $35.85 over the last 52 weeks.

Analyst Angela Larson upgraded shares to "Positive" from "Neutral", citing strong prescription growth for the pain drug Lidoderm and a rebound in sales for Opana, also a pain treatment, following a sales force expansion in 2007.

"All of this leads our forecast toward Endo being a strong brand company, with 95 percent of our sales forecast driven from brand products versus only 70 percent two years ago," she said in a note to investors.

Larson expects revenue in 2008 to reach just under $1.25 billion, slightly higher than the company's outlook for revenue between $1.22 billion and $1.24 billion.

Also, the new chief executive, David P. Holveck, brings a fresh eye to company expenses and investments, she said. Holveck will take the helm Tuesday, replacing Peter A. Lankau, who stepped down March 1 to pursue other interests.

The company has about $600 million in cash and no long-term debt, making it likely it will examine buyout opportunities, she added.

Still, some long-term concerns include competition from Durect Corp., which is developing a pain patch. Generic competition to Endo's Opana is also a lingering concern.