Faced with thousands of opioid lawsuits, Endo says it will likely file for bankruptcy 'imminently'
Endo International will likely be the next pharma company to file for bankruptcy under a mountain of opioid lawsuits.
The Dublin, Ireland-based company revealed in its Q2 results on Tuesday that it’s in talks with first lien creditors, and that “these negotiations will likely result in a pre-arranged filing under Chapter 11 of the U.S. Bankruptcy Code by Endo International plc and substantially all of its subsidiaries, which could occur imminently.”
The announcement comes about a month after unnamed sources hinted at a bankruptcy filing, according to the Wall Street Journal, which first reported the news.
It remains unclear whether the Chapter 11 filing will come before Endo has reached a deal with plaintiffs in thousands of ongoing lawsuits over its former opioid pain med Opana ER, though the company noted in a 10-Q filing that it’s in discussions with claimants.
Endo has not responded to a request for comment as of press time.
Opana ER was first approved in 2006, and six years later, Endo introduced a reformulated version intended to prevent physical or chemical manipulation for abuse. However, an FDA advisory committee voted 18-8 in 2017 that the drug’s benefits no longer outweighed the risks, as post-marketing data showed a “significant shift in the route of abuse.” The drug was taken off the market that year at the FDA’s request, and Endo now faces thousands of lawsuits against it.
The Irish company has settled some claims, including a handful earlier this year in which it agreed to shell out $65 million to Florida, $26 to West Virginia, $7.5 million to Louisiana, $9.75 million to Arkansas, and $9 million to Mississippi. However, most of the suits remain unresolved.
Meanwhile, Endo revealed in an SEC filing back in June that it missed interest payments of $38 million. While the company paid down that interest before the 30-day grace period was up, it has since missed interest payments of approximately $2 million due July 15, $45 million due July 31, and $1 million due Aug. 1.
“We chose to enter these grace periods while continuing discussions with certain creditors in connection with our evaluation of strategic alternatives. Our decision to enter these grace periods was not driven by liquidity constraints, as we had approximately $1.19 billion in cash as of June 30, 2022,” the company said in its 10-Q.
Endo wouldn’t be the first pharma company to file for bankruptcy to escape mounting opioid claims. Oxycontin manufacturer Purdue Pharma and Mallinckrodt have also submitted Chapter 11 filings in recent years.