NEW YORK Endo Health Solutions Inc (ENDP.O) has held talks in recent weeks with drugmakers potentially interested in buying the maker of pain relief medication, people familiar with the matter said on Wednesday.
The exploratory talks included parties such as Warner Chilcott Plc WCRX.O and Valeant Pharmaceuticals International Inc (VRX.TO), according to the sources. Endo announced in December its longtime chief executive, David Holveck, would retire in 2013.
Endo shares hit a four-month high on the news and ended trading up nearly 11 percent at $31.66 on the Nasdaq on Wednesday, giving the company a market value of $3.6 billion.
There is no official auction process currently underway for Chadds Ford, Pennsylvania-based Endo, and discussions about a potential sale are at a preliminary stage, said the sources, who requested anonymity because the matter is not public.
Representatives for Endo and Warner Chilcott did not immediately respond to requests for comment. Valeant declined to comment.
"The company is searching for a new CEO and a potential sale of the company quite often accompanies this process," UBS analysts wrote in a note on Wednesday.
"We wouldn't be surprised if either one of the companies mentioned above or several other of the global specialist pharma companies or even financial buyers end up bidding for Endo given its current valuation."
Endo, a diversified U.S. healthcare company, makes prescription pharmaceuticals used primarily to treat and manage pain.
Endo said on December 12 that it does not expect to meet its revenue and earnings forecast for 2013.
The warning came just a month after Endo cut its 2012 earnings forecast to account for lower sales of its prescription pain drug Opana ER, which faces competition from a generic.
Endo's Lidoderm pain-relieving patch, its biggest revenue driver, is also set to face competition beginning September 15, 2013, when Watson Pharmaceuticals Inc launches a generic version of the drug.
Endo has carried out acquisitions in recent years as it tries to diversify its portfolio. It expanded into devices and services with the acquisitions of HealthTronics in 2010 and American Medical Systems in 2011.
In 2010 Endo agreed to buy Qualitest Pharmaceuticals from private equity firm Apax Partners LLP for about $1.2 billion to grow its generic drug business.
(Reporting by Soyoung Kim and Greg Roumeliotis in New York; Editing by Dan Grebler)