Endo Health Solutions ($ENDP) said in June it would "explore strategic options" for its HealthTronics business, and now the drug and device outfit is selling off a segment of the business, part of a long-term effort to pare down and get back to revenue growth.
Cambridge, MA's Metamark Genetics has signed up to buy HealthTronics Laboratory Solutions for an undisclosed sum, eyeing the anatomical pathology services of Endo's urological device business. HLS operates diagnostic labs in Georgia and Pennsylvania, and MetaMark said folding the company into its operations will help it expand the use of ProMark, its prostate cancer diagnostic.
Now Endo has to find a taker for the rest of HealthTronics, which includes devices to break up gallstones, laser treatments for benign prostate hyperplasia and cryotherapy technologies. Endo bought the company for $223 million back in 2010, but stagnant sales have led it to look for an exit; HealthTronics' revenue sank about 1% to $104.4 million in the first half of 2013.
Endo's June announcement that it wanted out of the urological device business came alongside a plan to cut 15% of its workforce and trim $325 million in annual costs. Endo has again and again reduced its revenue guidance, and the company now expects up to $2.8 billion on the year, a roughly 5% reduction.
American Medical Systems, the device giant Endo bought in 2011 for $2.9 billion, isn't exactly helping the company turn things around. Last quarter, AMS' sales dipped 2% to $126 million, and the unit took a more than $54 million charge in order to settle just some of its pending vaginal mesh lawsuits. Endo hasn't said how many of the previously disclosed 5,000 suits still remain, and the company is set for its court appearance in December before a federal judge in West Virginia.
- read Endo's statement