Percocet maker Endo International files for bankruptcy

Opioid maker Endo International has filed for bankruptcy to limit liability from lawsuits related to opioid addiction and to reduce billions of dollars of debt.

In conjunction with the filing, Endo agreed in principle with state attorneys general to provide up to $450 million to state and local governments, ban the promotion of Endo’s opioids and require Endo to turn over millions of documents related to its role in the opioid crisis for publication in a public online archive.

The generic and specialty branded pharmaceutical company filed a so-called pre-arranged bankruptcy Tuesday night in the U.S. Bankruptcy Court for the Southern District of New York. A pre-arranged bankruptcy is filed with the support of creditors.

Under the plan, the maker of Percocet and other drugs will put itself up for sale and will sell itself in a $6 billion credit bid that will swap debt for equity in the reorganized company, unless it gets a better offer. Endo formerly made Opana, an opioid pain medication the Food and Drug Administration requested to be removed from the market in 2017 after concluding the benefits of the drug may no longer outweigh its risks.

Endo's India-based entities are not part of the Chapter 11 proceedings. The company expects to file recognition proceedings in Canada, the United Kingdom, and Australia.

"By definitively addressing the more than $8 billion of debt that has burdened our balance sheet and establishing a pathway to closure with respect to the thousands of opioid-related and other lawsuits that the company has been defending at an unsustainable cost, we will be able to move forward as a new Endo and reach our full potential," CEO Blaise Coleman said in a statement.

Ticker	Security	Last	Change	Change %
ENDO	ENDOCAN CORP	0.000001	+0.00	+0.00%

Last week, Endo warned a bankruptcy filing was "imminent" and that the company was in constructive talks with creditors.

The company had $8.1 billion of net debt as of June 30 and chose not to make certain interest payments when they came due on June 1 while it negotiated with creditors. Endo also had $1.19 billion of unrestricted cash including $78.4 million held in settlement funds for opioid-related matters.

CHINA AND MEXICO PLAY MAJOR ROLE IN US OPIOID EPIDEMIC

As of August 1, Endo faced 15 opioid-related lawsuits filed by states; 2,570 filed by local governments and Native American tribes; 310 by hospitals, health systems, unions, health and welfare funds or other third-party payers; and approximately 220 cases filed by individuals.

A bankruptcy filing would limit claims.

Opioid settlements

Other companies this year have addressed claims related to opioid addiction.

Purdue Pharma filed for Chapter 11 bankruptcy in September 2019 and had its settlement approved by a bankruptcy court in March under which the founding Sackler family agreed to pay $6 billion to help fund opioid trusts. 

Teva Pharmaceutical Industries announced a nationwide agreement in principle in July to pay $4.25 billion to settle claims, plus $100 million to Native American tribes. The figure includes up to $1.2 billion to supply its generic version of the life-saving medication, Narcan, at wholesale prices.

WEST VIRGINIA REACHES $400 MILLION SETTLEMENT WITH OPOID DISTRIBUTORS

Drugstore chain Walgreens agreed in May to pay Florida $683 million to resolve all claims related to the company’s pharmacies in the state.

Drug distributors AmerisourceBergen, Cardinal Health and McKesson agreed in February to pay $21 billion as part of a settlement with opioid maker Johnson & Johnson, who will add $5 billion.

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Ticker	Security	Last	Change	Change %
TEVA	TEVA PHARMACEUTICAL INDUSTRIES LTD.	16.78	+0.21	+1.27%
WBA	WALGREENS BOOTS ALLIANCE INC.	9.02	-0.04	-0.44%
ABC	NO DATA AVAILABLE	-	-	-
CAH	CARDINAL HEALTH INC.	122.24	-0.39	-0.32%
MCK	MCKESSON CORP.	628.50	+2.12	+0.34%
JNJ	JOHNSON & JOHNSON	155.01	-0.39	-0.25%