UPDATE: Piper Jaffray Downgrades Endo Pharmaceuticals to Underweight; More Downside Possible

Piper Jaffray downgraded Endo Pharmaceuticals (NASDAQ: ENDP) from Neutral to Underweight and lowered the price target from $28.00 to $22.00.

Piper Jaffray noted, "With persistent uncertainty over the extent of generic competition on Opana ER (near-term) and Lidoderm (longer-term), we believe there is risk to ENDP shares particularly given that Street estimates generally reflect only limited generic competition on both products. In this context, it is difficult to call a bottom regarding trough diluted EPS (though a possible – and ugly - worst case by 2015 could be well under $3; the Street is at $4.03 for 2015). Though chatter surrounding a sale of the company has supported the shares recently, we find it difficult to envision a buy-out given the potential for a precipitous decline in cash flows, high debt levels, and ill-fitting business units."

Endo Pharmaceuticals closed at $28.04 on Friday.

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