With opioid litigation looming and $8B in debt, Endo looking at bankruptcy play: WSJ

Endo may soon be on the growing list of former opioid sellers who are turning to bankruptcy as they face daunting litigation over their alleged role in fueling the opioid crisis in the United States.

The Ireland-based company is progressing toward a Chapter 11 filing, The Wall Street Journal reports. The move could hinder attempts by state and local governments to advance their cases against Endo, which stopped selling pain medicine Opana ER in 2017 at the insistence of the FDA.

Other former opioid sellers who had little choice but to turn to bankruptcy because of their dire financial straits were Purdue Pharma and Mallinckrodt. But unlike Endo, those companies largely had settlements in place before employing the tactic.

In debt to the tune of more than $8 billion and with thousands of lawsuits pending, Endo is trying to use bankruptcy to restructure, sources told the WSJ. In addition to dealing with plaintiffs, Endo is negotiating with creditors after falling behind on debt payments, the sources said, making for a complex situation.

Late last month, certain bondholders formed a group of investors who urged Endo not to file for bankruptcy. Instead, the group proposed a bond swap that would allow the company to function as is.

Endo has been in tumult for several years. In 2020, after a CEO switch, the company revealed its intention to cut 560 positions by 2023 and to exit manufacturing facilities in California, New York and India in an effort to reduce annual costs by $163 million to $183 million, Endo said at the time.

That move came after Endo cut 375 employees when it sidelined Opana ER. Then in 2019, the company made an ill-fated attempt to buy out sterile injectables firm Somerset Therapeutics for $190 million.

A bit of good news came in November of last year when Endo scored a $90 million contract from the U.S. to expand a manufacturing facility in Michigan.

The investment—which allowed the facility to add a fill-finish capability—came through the Defense Production Act and was designed to bolster the manufacture of essential drugs for the U.S.