Amid overwhelming opioid litigation, Endo files for bankruptcy and inks $450M settlement

Another opioid maker has decided to pursue bankruptcy in the face of mounting litigation.

Endo has filed for chapter 11 protection in New York, the Dublin-based company said Tuesday. The decision comes as Endo faces lawsuits accusing it of fueling the opioid crisis through illegal promotion of painkiller Opana ER, which it pulled from the market in 2017.

Also Wednesday, Endo reached a settlement with 36 states, including the District of Columbia, to resolve allegations that it falsely marketed opioids. Endo has agreed to pay the states $450 million over 10 years to support treatment and prevention of opioid use problems. It will also cough up opioid-related documents for public review and pay $2.75 million for archival expenses. The settlement will see Endo forgo opioid marketing forever.

Before the broad deal, Endo in September 2021 agreed to pay $50 million to settle opioid lawsuits in New York. In late 2021, the company reached a $63 million opioid settlement with Texas. In January and March, the company struck a $65 million deal with Florida and a $26 million settlement with West Virginia, respectively.

Endo isn't alone: Other opioid makers have shelled out big money to end various opioid-related lawsuits. The Sackler family, owners of OxyContin maker Purdue Pharma, previously reached a deal to pay up to $6 billion to settle opioid lawsuits.

In July, AbbVie’s Allergan ponied up $2.37 billion to end its opioid lawsuits, and Teva inked a $4.25 billion settlement. Earlier this year, Johnson & Johnson and three of the U.S.' largest drug distributors agreed to pay roughly $26 billion to resolve their litigation.

For Endo, the bankruptcy path addresses the company’s more than $8 billion debt and establishes a “pathway to closure” with all the lawsuits it has been fighting “at an unsustainable cost,” CEO Blaise Coleman said in a statement Tuesday. The process will enable Endo to focus on a business transformation, he added.

As part of the bankruptcy, Endo’s creditors have agreed to take over the business’s assets in exchange for extinguishing over $5.8 billion in debts, an Endo securities filing (PDF) shows. Creditors will also establish a fund of $550 million over 10 years to handle opioid claims, the company said.

Endo’s bankruptcy filing followed similar moves by Purdue Pharma and Mallinckrodt. Bankruptcy is a popular tool for corporations to shield themselves from product liabilities. J&J is also using a bankruptcy maneuver to limit exposure to lawsuits alleging that its popular talc baby powder causes cancer.

Beyond the now-discontinued opioid franchise, Endo has lately been under pressure with its large injectables business. Generic competition to diabetes insipidus injection Vasostrict caused a sharp 58% decline in Endo’s second-quarter sales in the sterile injectables segment, which fell to $123 million.

As part of its post-opioid transform, Endo recently paid $35 million to acquire six development-stage injectable candidates from Nevakar, with the first set to launch in 2025. It also put down $30 million upfront to in-license an injectable compound under phase 3 development for osteoarthritis knee pain from Taiwan Liposome Company.