Endo International, staring down thousands of lawsuits over its alleged role in furthering the opioid crisis, is expected to file for bankruptcy protection “imminently,” the drugmaker said Tuesday.
The disclosure comes a month after The Wall Street Journal reported that the drugmaker was considering the move. It comes even though Endo doesn’t have a deal in place to redress the many states, municipalities and private plaintiffs bringing suit against the firm for its role in producing, marketing and distributing opioids.
Endo’s painkiller Opana, which it discontinued in 2017 at the behest of the Food and Drug Administration, has figured in opioid-related lawsuits brought by state and local governments. The company has denied that the drug contributed to the opioid crisis.
While settlements have been reached with states such as Florida, Texas and New York, roughly 3,500 legal claims brought by states and cities remain. Endo is also burdened by $8.1 billion in debt that, paired with generic competition for its drug Vasostrict, has led to a steep decline in revenue.
Endo wouldn’t be the first drugmaker to seek bankruptcy protection over opioid litigation. Other pharma companies that have done so, albeit after settling with those bringing such cases, include Purdue Pharma and Mallinckrodt. Per U.S. bankruptcy code, companies are shielded from civil litigation.
As for Endo, the firm would pay out almost $7 billion of its $8 billion debt to creditors ahead of any opioid plaintiffs, leaving state and local governments to compete for a smaller pool of funds, according to a Tuesday report in the WSJ.
Such skirmishes may lead to a potentially protracted bankruptcy process, the Journal pointed out, because the drugmaker’s reorganization plan is contingent on reaching enough deals with those plaintiffs to convince the bankruptcy court to confer its blessing.
