Endo%20Pharmaceuticals

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Endo Pharmaceuticals

• CIBC World MarketsBiotechnology Specialty
  Pharmaceuticals Conference
• May 2002

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Forward-Looking Statements
This presentation contains forward-looking
statements, within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, as amended, that
are based on managements beliefs and
assumptions, current expectations, estimates and
projections. These statements are subject to
risks and uncertainties and, therefore, actual
results may differ materially from those
expressed or implied by these forward-looking
statements. Forward-looking statements are not
historical facts and include information
regarding the Companys possible or assumed
results of operations. Also, statements or
expressions that are preceded by, followed by, or
that include, the words believes,
anticipates, plans, expects, intends,
estimates or similar expressions are
forward-looking statements. Endos estimated or
anticipated future results, product performance
or other non-historical facts are forward-looking
and reflect Endos current perspective on
existing trends and information. Many of the
factors that will determine the Companys future
results are beyond the ability of the Company to
control or predict. The reader should not rely on
any forward-looking statement. The Company
undertakes no obligations to update any
forward-looking statements whether as a result of
new information, future events or otherwise.
Several important factors, in addition to the
specific factors discussed in connection with
these forward-looking statements individually,
could affect the future results of Endo and could
cause those results to differ materially from
those expressed in the forward-looking statements
contained herein. Important factors that may
affect future results include, but are not
limited to the Companys ability to successfully
develop, commercialize and market new products
results of clinical trials on new products
competition for the business of the Companys
branded and generic products, and in connection
with the Companys acquisition of rights to
intellectual property assets market acceptance
of the Companys future products government
regulation of the pharmaceutical industry the
Companys dependence on a small number of
products the Companys dependence on outside
manufacturers for the manufacture of its
products the Companys dependence on third
parties to supply raw materials and to provide
services for the core aspects of its business
new regulatory action or lawsuits relating to the
Companys use of narcotics in most of its core
products the Companys exposure to product
liability claims and product recalls and the
possibility that the Company may not be able to
adequately insure itself the Companys ability
to protect its proprietary technology the
Companys ability to successfully implement its
acquisition strategy the availability of
controlled substances that constitute the active
ingredients of some of the Companys products and
products in development the availability of
third-party reimbursement for the Companys
products the Companys dependence on sales to a
limited number of large pharmacy chains and
wholesale drug distributors for a large portion
of its total net sales and other risks and
uncertainties detailed in Endos Registration
Statement on Form S-4 filed with the Securities
and Exchange Commission on June 9, 2000, as
amended, and in Endos Registration Statement on
Form S-3 dated October 17, 2001. Readers should
evaluate any statement in light of these
important factors.
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Endo Pharmaceuticals

• A Specialty Pharmaceutical company focused in
  fast growing pain management market with
• An established portfolio of branded products
• A targeted national sales and marketing
  infrastructure
• Research and development expertise
• A substantial pipeline focused on pain management
• An experienced and successful management team

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Company History

• Endo founded
• Percodan launched
• Endo sold to DuPont
• Percocet launched
• August 1997 Endo formed as buyout from DuPont
  Merck
• November 1998 Lidoderm licensed from Hind
  Healthcare
• July 2000 Algos acquired
• October 2001 Follow-on offering completed

1920
1950
1969
1971
1997
1998
2000 2001
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Aggressive Pain Focus

• Pain Management represents a tremendous growth
  area
• Growing at a compounded growth rate of gt28
  annually
• Pain community is extremely aggressive
• Prescribing physician base highly concentrated

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Total Prescription Pain Market
98-01 CAGR 28
Sales (billions)
Source IMS
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Key Drivers of Market Growth

• Changing attitudes toward pain management
• Physicians
• Patients
• Changing environment toward treatment of pain
• Guideline changes
• Pain management now recognized as a board
  certified specialty
• Aging population
• Increase in number of surgical procedures

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Analgesics 2001 the second most prescribed
medication

• 2000
• Vascular agents
• Psychotherapeutics
• Anti-infective
• Analgesics
• Hormones
• Respiratory Therapy
• Gastrointestinal
• Anti-arthritics
• Diuretics
• Diabetes Therapy
• Narcotics comprise approximately 75 of analgesic
  prescriptions

• 2001
• Anti-infectives
• Analgesics
• Psychotherapeutics
• Vascular agents
• Hormones
• Respiratory Therapy
• Cough/Cold Preps
• Anti-arthritics
• Gastrointestinal
• Cholesterol Reducers Lipotropics
• Narcotics comprise approximately 76 of analgesic
  prescriptions

Source IMS 2001 Prescription Data
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Narcotic Analgesics
98-01 CAGR 31
Sales (billions)
Source IMS
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The Continuum of Pain
Mild
Moderate
Moderately Severe
Severe
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Pain Management Product Offering

• Established Portfolio of Branded Products
• Percocet
• Lidoderm
• Other established brands including
• Percodan
• Zydone
• Difficult to Develop Generics
• MS Contin generic
• Oxycontin generic (under FDA review and subject
  of litigation)

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Established Portfolio of Brands Percocet

• Percocet 5.0/325 launched
• Endo launches new strengths of Percocet
• April 2001 Generics of 7.5/500 and 10.0/650
  introduced
• November 2001 New strengths approved and
  launched
• Percocet 7.5/325 and Percocet 10.0/325

1971
1999
2001
2001
Gold Standard in pain management
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Percocet Prescriptions
Prescriptions (millions)
Source IMS
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Percocet Net Sales
Fiscal Year Ended
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Established Portfolio of Brands Lidoderm

• Approximately 1 million patients per year are
  afflicted with Herpes Zoster (commonly referred
  to as shingles)
• Approximately 70 of these patients experience
  some pain
• Acute
• Chronic (post herpetic neuralgia or PHN)
• Approximately 20 of shingles patients develop
  PHN
• The only FDA approved drug for the treatment of
  PHN a form of neuropathic pain
• Lidoderm provides analgesia

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Lidoderm Prescriptions
Prescriptions (thousands)
12/99
3/00
6/00
9/00
12/00
3/01
9/01
6/01
12/01
3/02
Quarter Ended
Source IMS
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Lidoderm Net Sales
Fiscal Year Ended
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Sales by Product
252.0
98-01 CAGR 33
197.4
138.5
108.4
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Targeted Sales and Marketing

• Direct marketing through national dedicated
  contract sales force
• 160 community-based field representatives
• 70 specialty institutional representatives
• Focus on high prescribing physicians in
• Pain management
• Surgery
• Oncology
• Primary care
• Option to internalize sales force

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RD Expertise

• Core expertise in narcotic analgesics
• Pipeline products launched in the past 4 years
  contributed 54 of 2001 net sales
• Three NDA products in Phase III and three NDA
  products in Phase II clinical trials
• Successful and proven record with the FDA

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Substantial Pipeline

• Key Pipeline Products Branding Development stage
• MorphiDex Branded Phase III
• Oxymorphone ER Branded Phase III
• Oxymorphone IR Branded Phase III
• HydrocoDexTM Branded Phase II
• OxycoDexTM Branded Phase II
• PercoDexTM Branded Phase II
• Oxycodone ER Generic ANDA filed

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NMDA-Enhanced Analgesia

• Opioid analgesics activate Mu receptors,
  triggering an intracellular response from NMDA
  (N-methyl-D-aspartate) receptors in the brain and
  spinal cord.
• NMDA receptors activate the enzyme PKC, which
  desensitizes Mu receptors, resulting in reduced
  analgesia.
• Dextromethorphan, an NMDA-receptor antagonist,
  prevents the activation of PKC.
• Combining dextromethorphan with an opioid
  analgesic prevents the desensitization of the Mu
  receptor, increasing analgesia.

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MorphiDex (morphine dextromethorphan)

• Dextromethorphan enhances morphine analgesia
• Pivotal chronic dosing study previously completed
• Morphine sparing
• Longer duration of pain relief
• Long-term clinical experience Safety established
• In response to Algos not-approvable letter
• Multiple-dose Phase III studies in chronic pain
  underway

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MorphiDex (morphine dextromethorphan)

• Multiple dose Phase III studies in chronic pain
  three-month treatment period
• 200-300 patients per study
• primary objective - morphine sparing (2
  studies) - superior analgesia (1 study)
• secondary objectives - define lowest fixed-dose
  MS/DM ratio (1 study)
• - tolerance (3 studies)
• Anticipate announcement of the results from the
  first of the three ongoing studies late in the
  second quarter 2002

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Oxymorphone ER/IR

• Pure opioid agonist marketed in U.S. as injection
  and suppository since 1960
• New oral extended and immediate release
  formulations
• Efficacy demonstrated
• First new opioid in decades
• 1,500 cancer and non-cancer patients in clinical
  program
• ER version co-developed with Penwest
  Pharmaceuticals
• Abstracts expected to be published at the 2002
  World Pain Congress
• Expect to file NDA applications in second half of
  2002

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Historical Financial Summary
Pro-forma for Algos acquisition. Excludes
non-cash COGS.
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First Quarter Financial Summary
(1) Excludes non-cash COGS.
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Projected Financial Summary
Net Sales
Consolidated EBITDA(1)
(1) Excludes non-cash COGS.
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Proven Track Record
Strategy
Achievement

• Leverage brand equity of products

• Launched new strengths of Percocet in November
  1999 and new strengths of Percocet in November
  2001

• Line extensions

• Launched Zydone in February 1999

• Only AB-rated generic of all five strengths of MS
  Contin on the market
• First to file 10, 20 and 40 mg generic version of
  Oxycontin

• Develop difficult generics

• Acquire products within the pain management
  therapeutic class

• Launched Lidoderm for PHN in September 1999

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2002 Expected Milestones

• Amendment to MorphiDex filing
• File NDAs for extended-release and
  immediate-release oxymorphone
• Continue to advance future product line through
• Advancement of Phase II and earlier projects
• Acquire and in-license complementary products,
  compounds and technologies

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Endo Pharmaceuticals

• CIBC World MarketsBiotechnology Specialty
  Pharmaceuticals Conference
• May 2002