The shares of drug maker Endo International (ENDP) are tumbling after the company slashed its full-year guidance, leading a number of analysts to downgrade the stock. A number of other pharmaceutical company's that have similarly followed "roll-up" strategies of growth via serial acquisition are also falling the wake of Endo's quarterly report.

RESULTS AND GUIDANCE: Endo last night reported first quarter earnings per share, excluding certain items, of $1.08, versus the consensus outlook of $1.04. The company's revenue also came in above expectations. However, the company reduced its 2016 EPS outlook, excluding certain items, to $4.50-$4.80 from $5.85-$6.20. Endo blamed the guidance cut on increased competition, larger than expected reductions in the prices of generic drugs, and regulators' delays of actions on its products.

STREET REACTION: Piper Jaffray analyst David Amsellem downgraded the firm's rating on Endo to Neutral from Overweight, saying the company's guidance reduction was caused by "significant pressure on its generics segment and opioid products in particular." Moreover, Endo's guidance cut was much larger than Amsellem anticipated, and the company's earnings may not increase in 2017, he stated. Amsellem cut his price target on the name to $25 from $79. Given the increased competition that Endo's U.S. generic drugs are facing and the "underwhelming performance" of its acquired brands, it's "increasingly difficult" to be optimistic about any of the company's revenue drivers, according to Jason Gerberry, an analyst at Leerink Swann.

Furthermore, the company probably will have limited options when it comes to cash deployment over the next 18 months, Gerberry believes. Investors' focus will probably turn to the possibility of the company being acquired, but "the list of buyers may be short," Gerberry wrote. He lowered his price target on the shares to $23 from $37. Mizuho and RBC Capital also downgraded Endo today, with Mizuho cutting its rating on the stock to Underperform and RBC Capital lowering its rating to Sector Perform.

PRICE ACTION: In early trading, Endo tumbled 40% to $16.11. Other "roll-up" drug makers and those involved in generics also fell, with Mallinckrodt (MNK) dropping 8% to $55.88, Valeant (VRX) sinking 8.4% to $31.58, Perrigo (PRGO) declining 3.3% to $93.86, Akorn (AKRX) slipping 8.7% to $21.80 and Allergan (AGN) falling 4.3% to $201.57.