Investors - Company Profile

Our Competitive Strengths

We believe that we have established a position as a market leader among specialty pharmaceutical companies by capitalizing on our following core strengths:

Established portfolio of branded products.  We have assembled a portfolio of branded pharmaceutical products to treat and manage pain.  These products include Lidoderm^® (lidocaine patch 5%), a topical patch containing lidocaine and the first FDA-approved product to treat the pain relating to post-herpetic neuralgia.  The Lidoderm^® patch is protected by five Orange Book-listed patents, the last of which expires in 2015.  Net sales of the Lidoderm^® patch increased 25% in 2007, to $705.7 million from $566.8 million in 2006.  We consider Percocet^® tablets, our oxycodone / acetaminophen combination product and Percodan^® tablets, our oxycodone/aspirin combination product, which have been marketed since 1976 and 1950, respectively, to be "gold standards" of pain management based on their long history of demonstrated product safety and effectiveness.  We believe our close relationships with the physicians who are considered to be pain management "thought leaders" in pain centers, hospitals, and other pain management institutions enable us to improve our market penetration.  We believe this interaction with the thought leaders and our track record of developing and launching new products has allowed us to pursue, through in-licensing and acquisitions, novel products for the treatment of pain and complementary therapeutic areas.

In 2006, Endo launched two such products, as follows:

Opana^® ER tablets, indicated for the relief of moderate-to-severe pain in patients requiring continuous, around-the-clock opioid treatment for an extended period of time. Opana^® ER is not intended to be used on an as-needed basis.  This is the first time oxymorphone will be available in an oral, extended-release formulation and is available in 5mg, 10mg, 20mg and 40mg tablets.

Opana^® (the immediate release version), indicated for the relief of moderate-to-severe acute pain where the use of an opioid is appropriate and will be available in 5mg and 10mg tablets.

Substantial pipeline focused on pain management with a balanced focus on complementary therapeutic areas.  On July 19, 2006, Endo submitted to the U.S. Food and Drug Administration (FDA) a supplemental New Drug Application (sNDA) for Frova^® 2.5 mg tablets for the short-term (six days per month) prevention of menstrual migraine (MM). This submission included data from previously reported pivotal Phase III studies that met their primary efficacy endpoints of significantly improving the number of headache-free perimenstrual periods. On September 30, 2007, Endo and its development partner, Vernalis plc, announced that that the FDA had identified deficiencies and asked for additional information pertaining to this sNDA in a “not approvable” letter.

While the FDA acknowledged that both pivotal efficacy trials that had been submitted as part of this sNDA met their primary endpoints, it questioned whether the benefit demonstrated was clinically meaningful. The FDA also noted that even though serious vascular adverse events were not observed in this drug development program, an increased risk (compared to the approved acute use) could not be ruled out.

The companies noted that the non-approvable letter raised a number of issues that will need to be fully analyzed and then discussed with the FDA. Following this discussion with the FDA, Endo and Vernalis will decide upon the appropriate course of action.

We currently have three products in Phase III clinical development: Rapinyl^TM for breakthrough cancer pain, a topical ketoprofen patch for the localized treatment of acute pain associated with soft-tissue injuries, and EN 3285, an oral rinse for the prevention of oral mucositis.  We are also developing a transdermal sufentanil patch intended for the treatment of chronic moderate-to-severe pain for up to seven days.  We initiated Phase II clinical trials in the first half of 2007.

Research and development expertise.  Our research and development effort is focused on expanding our product portfolio by capitalizing on our core expertise with analgesics.  We have assembled an experienced and multi-disciplined research and development team of scientists and technicians with a proven expertise working with analgesics and complex formulations.  We believe this expertise allows for timely FDA approval of our products.  We have demonstrated our ability to commercialize our research and development efforts through the launch of a number of new products and product line extensions since August 1997.  The most recent and best examples are Opana® ER and Opana®, both of which were products that Endo developed internally from preclinical testing to commercialization.

Targeted national sales and marketing infrastructure.  We market our products directly to physicians through an internal sales force of approximately 690 specialty/institutional representatives and community-based field representatives.  Through our sales force, we market our branded pharmaceutical products to approximately 70,000 physicians.

Selective focus on generic products.  Our generic product portfolio includes products focused on pain management.  Development of these products involves barriers to entry such as complex formulation, regulatory or legal challenges or difficulty in raw material sourcing.  We believe products with these characteristics will face a lesser degree of competition and therefore provide longer product life cycles and higher profitability than commodity generic products.  We have executed our generic product development strategy successfully to date with products such as morphine sulfate extended-release tablets that we introduced in November 1998 as a bioequivalent version of MS Contin. Endo’s specialized generic portfolio also includes Endocet®, the generic version of our Percocet® brand tablets.

Leveraging our pain management expertise by developing proprietary products and generic products with significant barriers to market entry.  To capitalize on our expertise in pain management, we are developing new products to address acute, chronic and neuropathic pain conditions.  We are developing new patent-protected products that may substantially improve the treatment of pain.  For example, we co-developed with Penwest Pharmaceuticals Co. Opana® ER, an oral extended-release version of oxymorphone and developed Opana®, an oral immediate-release version of oxymorphone.  The FDA approved the NDAs for Opana® ER and Opana® on June 22, 2006, and both products became available commercially in July 2006.

Acquiring and in-licensing complementary products, compounds and technologies.  We look to continue to enrich our product line through selective product acquisitions and in-licensing, or acquiring licenses to products, compounds and technologies from third parties.  In August 2004, we entered into a license agreement with Vernalis Development Limited for the exclusive North American marketing rights to Frova^® (frovatriptan succinate), a triptan indicated for the acute treatment of migraine headaches in adults. Also in August 2004, we entered into an agreement granting us the exclusive rights to develop and market Orexo AB's (a privately held Swedish company) patented sublingual muco-adhesive fentanyl product (Rapinyl^™) in North America. Rapinyl^™ is a fast-dissolving tablet of fentanyl intended for the treatment of breakthrough cancer pain. In March 2005, we entered into an agreement with ProEthic Pharmaceuticals, Inc. for the U.S. and Canadian rights to develop and commercialize a once-daily ketoprofen-containing topical patch that is currently in Phase III clinical trials. Ketoprofen is an FDA-approved non-steroidal anti-inflammatory drug (NSAID) generally used for the treatment of inflammation and pain and only available in the U.S. in oral form. Also in March 2005, we entered into an agreement for the exclusive license to develop and commercialize DURECT Corporation's sufentanil-containing transdermal patch in the U.S. and Canada. The sufentanil patch, which is in Phase II clinical development, employs DURECT's proprietary TRANSDUR^™ drug-adhesive matrix formulation and is intended to provide relief of moderate-to-severe chronic pain for up to seven days.

In October 2006, Endo acquired all of the outstanding stock of RxKinetix, Inc., a privately held company that develops new formulations of approved products for oral mucositis and other supportive care oncology conditions.  The lead product obtained in the acquisition was a topical oral rinse with the active ingredient formulated in RxKinetix's proprietary ProGelz® drug delivery platform. This product, known as EN 3285, is in clinical Phase III for the prevention of oral mucositis, painful mouth sores that often occur in cancer patients undergoing radiation and chemotherapeutic treatment.

On December 27, 2007, we entered into an agreement with Alexza Pharmaceuticals, Inc. for the exclusive clinical development and commercialization rights in North America for Alexza's AZ-003 (Staccato® fentanyl). Currently in Phase I clinical development, AZ-003 (since renamed as EN 3294) is a hand-held drug delivery system that uses Alexza’s proprietary Staccato® system inhalation technology to deliver fentanyl for the treatment of breakthrough pain in cancer and non-cancer patients.

Our Industry

According to Wolters Kluwer Health data, the total U.S. market for pain management pharmaceuticals, excluding over-the-counter products, totaled $21.5 billion in 2007.  Our primary area of focus within this market is analgesics, specifically opioid analgesics.  In 2007, analgesics were the third most-prescribed medication in the United States, with more than 273 million prescriptions written for this classification.  These products are used primarily for the treatment of pain associated with orthopedic fractures and sprains, back injuries, migraines, joint diseases, cancer and various surgical procedures.

Opioid analgesics comprised approximately 80% of the analgesics prescriptions in 2007.  This market segment totaled $8.2 billion in 2007, representing a compounded annual growth rate of 6% since 2003.  If branded products were substituted for generic products, we believe the dollar value of this market segment would be substantially larger.  The growth in this segment has been primarily attributable to:

• increasing physician recognition of the need and patient demand for effective treatment of pain;
• aging population (according to the U.S. Census Bureau, in 2000 the population aged 65 and older reached 35 million and is expected to grow to 40 million by 2010, representing 14% growth over this period);
• introduction of new and reformulated branded products; and
• increasing incidence of chronic pain conditions, such as cancer, arthritis and low back pain.